This Court in paragraph 9 of the Report observed: "Usually, the prayer for grant of an

interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff
and its alleged violation are both contested and uncertain and remain uncertain till they are
established at the trial on evidence. The court, at this stage, acts on certain well settled principles
of administration of this form of interlocutory remedy which is both temporary and discretionary.
The object of the interlocutory injunction, it is stated "..is to protect the plaintiff against injury by
violation of his rights for which he could not adequately be compensated in damages recoverable
in the action if the uncertainty were resolved in his favour at the trial. The need for such
protection must be weighed against the corresponding need of the defendant to be protected
against injury resulting from his having been prevented from exercising his own legal rights for
which he could not be adequately compensated. The Court must weigh one need against another
and determine where the `balance of convenience' lies."
(2) The Court, once satisfied of these matters will then consider whether the balance of
convenience lies in favour of granting injunction or not, that is, whether justice would be best
served by an order of injunction.
(3) The Court does not and cannot judge the merits of the parties `s respective cases and that any
decision of justice will be taken in a state of uncertainty about the parties' rights."
It would seem to follow therefore, that what should be borne in mind, in addition to what has
been phrased in Lord Diplock's speech, is that if there is uncertainty, the Court should be doubly
reluctant to issue an injunction, the effect of which is to settle the parties' rights once for all. On a
clear analysis of the speech of Lord Diplock, it appears that if damages, recoverable at common
law, would be an adequate remedy and the defendant would be in a financial position to pay the
same, no interlocutory injunction should normally be granted, howsoever strong the plaintiff's
claim appear to be at that stage. Lord Diplock went on to observe further that in the event of
there being any doubt, as to the adequacy of the respective remedies and damages available to
either party or both, then and in that event, the question of balance of convenience arises and the
same will vary from case to case. Similar view has also been expressed by the House of Lords in
the case of Dimbleby & Sons Ltd Vs. National Union of journalists (1984 1 ALL ER
(ii) whether the balance of convenience is in favour of the plaintiff; and (iii) whether the
plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed.
The decision whether or not to grant an interlocutory injunction has to be taken at a time when
the existence of the legal right assailed by the plaintiff and its alleged violation are both
contested and uncertain and remain uncertain till they are established at the trial on evidence.
Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the
plaintiff during the period before that uncertainty could be resolved. The object of the
interlocutory injunction is to protect the plaintiff against injury by violation of his right for which
he could not be adequately compensated in damages recoverable in the action if the uncertainty
were resolved in his favour at the trial. The need for such protection, has, however, to be
weighed against the corresponding need of the defendant to be protected against injury resulting

from his having been prevented from exercising his own legal rights for which he could not be
adequately compensated. The court must weigh one need against another and determine where
the "balance of convenience" lies. (see: Wander Ltd. Vs. Antox India (P) Ltd, (1990 (supp) SCC
at pp.731-32.) In order to protect the defendant while granting an interlocutory injunction in his
favour the court can require the plaintiff to furnish an undertaking so that the defendant can be
adequately compensated if the uncertainty were resolved in his favour at the trial".
Mr. Salve appearing for the Respondent/Complainant strongly contended that by using `Suraksha
Chakra' in the commercial advertisement specially in Hindi, the appellant has, in fact, targeted
the ordinary common man in the Hindi belt so as to give an expression that the toothpaste as
matter of fact provides a durable and permanent protection with respect to germs, toothdecay and
bad breath to the entire family and "Suraksha Chakra" depicts the same. Mr. Salve contended that
at this stage, question of there being any definite finding on any of the issues would not arise
since only an arguable case is required to be made out at this juncture. Probably an arguable case
leading to the establishment of the prima facie case is required - we have dealt with this issue in
the early part of this judgment and as such we need not detain ourselves on this score but the fact
remains that question of the balance of convenience of the parties have not been dealt with or
discussed in the order of the Commission. Mr. Salve in continuation of his submission contended
that there is, in fact, a cross appeal by the Complainant by reason of the failure of the
commission to pass orders as regards the three limbs of the advertisement namely `germ
fighting', `toothdecay' and `bad breath' and the fact however remains that the Commission was
otherwise satisfied that this cannot but be termed to be a case similar in nature as was heard by
the Federal Trade Commission wherein the invisible shield was taken recourse to by the
appellants. Mr. Salve contended that at least there would be an arguable case by reason of the
order of FTC and as such question of interference in Appeal by this Court in terms of provisions
of Section 55 does not arise more so by reason of the fact that the Commission has not returned
any finding as regards the three principal issues but passed an order of injunction only as regards
the `Suraksha Chakra' by reason of the specific order of the FTC as noticed above.

In 1976, in Nebraska Press Association v. Hugh Stuart, 49 L.Edn. 683, where the facts of the
case were entirely different to the present ones, Chief Justice Burger delivered the opinion of the
Court saying that to the extent that the order prohibited the reporting of evidence adduced at the
open preliminary hearing in a murder trial was bad. Chief Justice Burger reiterated that a
responsible Press has always as the handmaiden of effective judicial administration, the criminal
field. The observations of Learned Hand referred to at page 683 indicate "the gravity PG NO 228
of the evil, discounted by its improbability, justifies such invasion of free speech as is necessary
to avoid the danger", as the test. Hence, we must examine the gravity of the evil. In other words,
a balance of convenience in the conventional phrase of Anglo-Saxon Common Law
Jurisprudence would, perhaps be the proper test to follow. In this background it would be
appropriate to refer to some of the English decisions to which our attention was drawn. Mr.
Jethmalani relied on the observations of Lord Denning in the Court of Appeal in Attorney
General v. British Broadcasting Corpn., [1979] 3 AER 45, where the Master of Rolls Lord

Denning characterised some of these similar type of injunctions as "gagging injunctions". Mr.
Baig, however, protested that in view of the terms in which the injunction was issued in the
instant case, the order did not "gag" anything that was legitimate. The House of Lords, however,
did not approve the observations of Lord Denning. We may refer to the observations of the
House of Lords in Attorney General v. B.B.C., [1981] AC 303, wherein the Attorney General
brought proceedings for an injunction to restrain the defendants from broadcasting a programme
dealing with matters which related to an appeal pending before a local valuation court on the
ground that the broadcast would be a contempt of court. The Divisional Court of the Queen's
Bench Division, on the single issue before it, held that a local valuation court was a court for the
purposes of the powers of the High Court relating to contempt. On appeal, the Court of Appeal,
by a majority, affirmed that decision. The House of Lords, however, allowed the appeal and held
that the jurisdiction of the Divisional Court in relation to contempt did not extend to a local
valuation court because it was a court which discharged administrative functions and was not a
court of law and the Divisional Court's jurisdiction only extended to courts of law and when it
referred to 'Inferior courts' must be taken as inferior courts of law and though the local valuation
court has some of the attributes of the long-established 'Inferior Courts' public policy required in
the interests of freedom of speech and freedom of the press that the principles relating to
contempt of court should not apply to it or to the host of other modern tribunals which might be
regarded as 'inferior courts'.
On the other hand, Mr. Diwan submitted that there is no jury trial involved here and no
likelihood of the trial being prejudiced because trial is by professionally trained Judges. Public
have a right to know about this issue of debentures which is a matter of public concern. It affects
the public interest, so public have a right to know and the newspapers have an obligation to
inform.
We must see whether there is a present and imminent danger for the continuance of the
injunction. It is difficult to lay down a fixed standard to judge as to how clear, remote or
imminent the danger is. The order passed on l9th August, 1988 as reiterated on 25th August,
1988 stated that there must be no legal impediment in the issue of the debentures or in the
progress of the debentures, taking into account the overall balance and convenience and having
due regard to the sums Of money involved and the progress already made. It is necessary to
reiterate that the continuance of this injunction would amount to interference with the freedom of
Press in the form of preventive injunction and it must, therefore, be based on reasonable grounds
for the sole purpose of keeping the administration of justice unimpaired. In the words of Mr.
Justice Brandeis of the American Supreme Court concurring in Charlotte Anita Whitney . People
of the State of California, 71 L. Edn. 109S at 1106, there must be reasonable round to believe
that the danger apprehended is real and imminent. This test we accept on the basis of balance of
convenience. This Court has not yet found or laid down any formula or test to determine how the
balance of convenience in a situation of this type, or how the real and imminent danger should
be judged in case of prevention by injunction of Publication of an article in a pending matter. In
the context of the facts of this case we must judge whether there is such an imminent danger
which calls for continuance of the injunction. Incidentally, it may be mentioned that the so-called
informed Press may misrepresent the Court proceedings. We must remember that the people at
large have a right to know in order to be able to take part in a participatory development in the
PG NO 235 industrial life and democracy. Right to Know is a basic right which citizens of a free

country aspire in the broader horizon of the right to live in this age in our land under Article 21
of our Constitution. That right has reached new dimensions and urgency. That right puts greater
responsibility upon those who take upon the responsibility to inform.
In the peculiar facts of this case now that the subscription to debentures has closed and, indeed,
the debentures have been over-subscribed, we are inclined to think that there is no such imminent
danger of the subscription being withdrawn before the allotment and as to make the issue
vulnerable by any publication of article. On a balance of convenience, we are of the opinion that
continuance of injunction is no longer necessary.
In this peculiar situation our task has been difficult and complex. The task of a modern Judge, as
has been said, is increasingly becoming complex. Furthermore, the lot of a democratic Judge is
heavier and thus nobler. We cannot escape the burden of individual responsibilities in a particular
situation in view of the peculiar facts and circumstances of the case. There is no escape in
absolute. Having regard however, to different aspects of law and the ratio of the several
decisions, by which though we are not bound, except the decisions of this Court referred to
hereinbefore, about which we have mentioned, there is no decision dealing with this particular
problem, we are of the opinion that as the Issue is not going to affect the ,general public or public
life nor any injury is involved, it would be proper and legal, on an appraisal of the balance of
convenience between the risk which will be caused by the publication of the article and the
damage to the fundamental right of freedom of knowledge of the people concerned and the
obligation of Press to keep people informed, that the injunction should not continue any further.
In the aforesaid view of the matter, we direct that there is no further need for the continuance of
the injunction.
A somewhat narrower ground, as I understand it, put forward for the petitioner was that the grant
of ex parte injunction by us on 19.8.88 and 25.8.88 was the result of our prima facie conclusion
that consents, approvals or permissions from the concerned authorities for the debenture issue
had been duly and validly obtained by the petitioner and that any article, liberty for the
publication of which is sought for by the vacation of the interim order, would contain views
contrary to or inconsistent with the prima facie view of this Court. Persons reading the
newspaper might be taken in by and believe in the statements made by the respondents in such
articles and, if they start acting upon such beliefs, then the effect of the order of this Court,
upholding, prima facie, the validity of the debenture issue on the above aspects would stand
undermined. In my view this contention is untenable. I do not think that the contention proceeds
on a correct analysis of the ratio of our order dated 25.8.88 or the earlier order dated 19.8.88. It
should be remembered that the proceedings, which gave rise to the transfer applications, were
writ petitions and a suit filed in various courts challenging inter alia, the validity or regularity Of
the debenture issue of the petitioner company. If these matters had been heard by the PG NO 238
various High Courts or other subordinate courts, there was a possibility that one or more of the
courts, satisfied with the prima facie tenability of the contentions of the petitioners therein might
issue an order staying the debenture issue pending disposal of the suit or writ petition. In fact,
also, it seems that interim orders of this nature had been obtained. The petitioner was
apprehensive that, if any such interim order was passed, all the time, labour and money expended
in floating the debenture issue might be nullified at the last moment. The petitioner, therefore,
moved for the transfer of all the various proceedings to this Court and for an interim order

permitting it to issue the debentures as planned without let or hindrance and without being
hampered by any interim stay order from any court. I do not think it would be correct to say that,
when we passed the order dated C 19.8.88, we formed any prima facie opinion on the question
whether the debenture issue had been validly approved or consented to by the various authorities.
Though it is true that there were averments in the transfer petitions stating that all the legal
formalities had been properly complied with, what predominantly influenced us to pass the order
dated 19.8.88 was that, even assuming, prima facie, as contended in the various writ petitions
and suits, that there could be some doubt regarding the validity or otherwise of the consent
orders etc., the restraint by any court or tribunal on the issue of debentures at a late stage might
prove catastrophic, and cause irreparable loss or damage, to the petitioner. We were also of the
opinion that. pending adjudication on the issue of validity raised in the various suits, the balance
of convenience required that there should be no order of any court or tribunal staying the
debenture issue.
In Union of India v. Oswal Woollen Mills Ltd., we had occasion to consider an interim order
passed by the Calcutta High Court in regard to a matter no part of the cause of action relating to
which appeared to arise within the jurisdiction of the Calcutta High Court. In that case the
interim order practically granted the very prayers in the writ petition. We were forced to observe,
"It is obvious that the interim order is of a drastic character with a great potential for mischief.
The principal prayer in the writ petition is the challenge to the order made or proposed to be
made under Clause 8 of the Import Control order. The interim order in terms of prayers (j) and
(k) has the effect of practically allowing the writ petition at the stage of admission without
hearing the opposite parties. While we do not wish to say that a drastic interim order may never
be passed without hearing the opposite parties even if the circumstances justify it, we are very
firmly of the opinion that a statutory order such as the one made in the present case under Clause
8-B of the Import Control order ought not to have been stayed without at least hearing those that
made the order. Such a stay may lead to devastating consequences leaving no way of undoing the
mischief. Where a plentitude of power is given under a statute, designed to meet a dire situation,
it is no answer to say that the very nature of the power and the consequences which may ensue is
itself a sufficient justification for the grant of a stay of that order, unless, of course, there are
sufficient circumstances to justify a strong Prima facie inference that the order was made in
abuse of the power conferred by the statute. A statutory order such as the one under Clause 8-B
purports to be made in the public interest and unless there are even stronger grounds of public
interest an expert interim order will not be justified. The only appropriate order to make in such
cases is to issue notice to the respondent and make it returnable within a short period. This
should particularly be so where the offices of the principals respondents and relevant records lie
outside the ordinary jurisdiction of the court. To grant interim relief straightaway and leave it to
the respondents to move the court to vacate the interim order may jeopardise the public interest.
It is notorious how if an interim order is once made by a court, parties employ every device and
tactic to ward off the final hearing of the application. It is, therefore, necessary for the courts to
be circumspect in the matter of granting interim relief, more particularly so where the interim
relief is directed against orders or actions of public officials acting in discharge of their public
duty and in exercise of statutory powers. On the facts and circumstance of the present case, we
are satisfied that no interim relief should have been granted by the High Court in the terms in
which it was done", We repeat and deprecate the practice of granting interim order which
practically give the principal relief sought in the petition for no better reason than that a prima

facie case has been made out, without being concerned about the balance of convenience, the
public interest and a host of other relevant considerations. Regarding the practice of some clever
litigants of resorting to filing writ petitions in the far-away courts having doubtful jurisdiction,
we had this to observe:
"After hearing learned counsel for the rival parties, we are of the opinion that the interim order
passed by the High Court on November 29, 1983 is not warranted since it virtually grants to the
respondents a substantial part of the relief claimed by them in their writ petition. Accordingly, we
set aside the said order".
We have come across cases where the collection of public revenue has been seriously
jeopardised and budgets of Governments and Local Authorities affirmatively prejudiced to the
point of precariousness consequent upon interim orders made by courts. In fact instances have
come to our knowledge where Governments have been forced to explore further sources for
raising revenue, sources which they would rather well leave alone in the public interest, because
of the stays granted by courts. We have come across cases where an entire Service is left in a stay
of flutter and unrest because of interim orders passed by courts, leaving the work they are
supposed to do in a state of suspended animation. We have come across cases where buses and
lorries are being run under orders of court though they were either denied permits or their
permits had been canceled or suspended by Transport Authorities. We have come across cases
where liquor shops are being run under interim orders of court. We have come across cases
where the collection of monthly rentals payable by Excise Contractors has been stayed with the
result that at the and of the year the contractor has paid nothing but made his profits from the
shop and walked out. We have come across cases where dealers in food grains and essential
commodities have been allowed to take back the stocks seized from them as if to permit them to
continue to indulge in the very practices which were to be prevented by the seizure. We have
come across cases where land reform and important welfare legislations have been stayed by
courts. Incalculable harm has been done by such interim orders. All this is not to say that interim
orders may never be made against public authorities. There are, of course, cases which demand
that interim orders should be made in the interests of justice. Where gross violations of the law
and injustices are perpetrated or are about to be perpetrated, it is the bounden duty of the court to
intervene and give appropriate interim relief. In cases where denial of interim relief may lead to
public mischief, grave irreparable private injury or shake a citizen's faith in the impartiality of
public administration, a Court may well be justified in granting interim relief against public
authority. But since the law presumes that public authorities function properly and bonafide with
due regard to the public interest, a court must be circumspect in granting interim orders of far
reaching dimensions or orders causing administrative, burdensome inconvenience or orders
preventing collection of public revenue for no better reason than that the parties have come to the
Court alleging prejudice, inconvenience or harm and that a prima facie case has been shown.
There can be and there are no hard and fast rules. But prudence, discretion and circumspection
are called for. There are several other vital considerations apart from the existence of a prima
facia case. There is the question of balance of convenience. There is the question of irreparable
injury. There is the question of the public interest There are many such factors worthy of
consideration. We often wonder why in the case indirect taxation where the burden has already
been passed on to the consumer, any interim relief should at all be given to the manufacturer,

dealer and the like ! There is just one more thing that we wish to say. In Siliguri v. Amalendu
Das, the Court was put to the necessity of pointing out the following:
Now coming to the facts of the present case, the respondent, Dunlop India Limited is a
manufacturer of types, tubes and various other rubber products. By a notification dated April 6,
1984 issued by the Government of India, Ministry of Finance (Department of Revenue) in
exercise of the powers conferred by Rule 8 (1) of the Central Excise Rules, 1944, types, falling
under item No. 16 of the First Schedule to the Central Excise and Salt Act, 1944, were exempt
from a certain percentage of excise duty to the extent that the manufacturers had not availed
themselves of the exemption granted under certain other earlier notifications The Department
was of the view that the Company was not entitled to the exemption as it had cleared the goods
earlier without paying central excise duty, but on furnishing Bank Guarantees under various
interim orders of courts. The Company claimed the benefit of the exemption to the tune of Rs.
6.05 crores and filed a writ petition in the Calcutta High Court and sought an interim order
restraining the central excise authorities from the levy and collection of excise duty. The learned
single judge took the view that a prima facie case had been made out in favour of the Company
and by an interim order allowed the benefit of the exemption to the tune of Rs. two crores ninety
three lakhs and eighty five thousand for which amount the company was directed to furnish a
Bank Guarantee, that is to say, the goods were directed to be released on the Bank Guarantee
being furnished. An appeal was preferred by the Assistant Collector of Central Excise under
clause 10 of the Letters Patent and a Division Bench of the Calcutta High Court confirmed the
order of the learned single Judge, but made a slight modification in that the Collector of Central
Excise was given the liberty to encash 30% of the Bank Guarantee. The Assistant Collector of
Central Excise has preferred this appeal by special leaue. By our interim order dated November
15, 1984, we vacated the orders granted by the learned single Judge as well as by the Division
Bench. We gave two weeks' time to the A respondent Company to file a counter No. counter has,
however been filed. Shri F.S. Nariman, learned counsel, however appeared for the respondent.
We do not have the slightest doubt that the orders of the learned single judge as well as Division
Bench are wholly unsustainable and should never been made. Even assuming that the company
had established a prima facie case, about which we do not express any opinion, we do not think
that it was sufficient justification for granting the interim orders as was done by High Court.
There was no question of any balance of convenience being in favour of the respondentCompany. The balance of convenience was certainly in favour of the Government of India.
Governments are not run on mere Bank Guarantees. We notice that very often some courts act as
if furnishing a Bank Guarantee would meet the ends of justice. No governmental business or for
that matter no business of any kind can be run on mere Bank Guarantees. Liquid cash is
necessary for the running of a Government as indeed any other enterprise. We consider that
where matters of public revenue are concerned, it is of utmost importance to reales that interim
orders ought not to be granted merely because a prima facie case has been shown. More is
required. The balance of convenience must be clearly in favour of the making of an interim
order and there should not be the slightest indication of a likelihood of prejudice to the public
interest. We are very sorry to remark that these considerations have not been borne in mind by
the High Court and interim order of this magnitude had been granted for the mere asking. The
appeal is allowed with costs. E N.V.K. Appeal allowed.
Bombay Dyeing & Manufacturing Co. ... vs Bombay Environmental Action ... on 11 May, 2005

Author: S.B. Sinha

Bench: N. Santosh Hegde, S.B. Sinha
CASE NO.:
Appeal (civil) 3271 of 2005
PETITIONER:
Bombay Dyeing & Manufacturing Co. Ltd.
RESPONDENT:
Bombay Environmental Action Group & Ors.
DATE OF JUDGMENT: 11/05/2005
BENCH:
N. Santosh Hegde & S.B. Sinha
JUDGMENT:

J U D G M E N T [@SLP (C) No. 7405 OF 2005] WITH I.A. NO.2 IN C.A. @ SLP (CIVIL)
NO.7405 OF 2005 WITH CIVIL APPEAL NO. OF 2005 [@SLP (C) Nos. 7549-7550 of 2005]
WITH I.A. NO. 7-11 IN C.A. @ SLP (CIVIL) NOS.7549-7550 OF 2005 WITH CIVIL APPEAL
NO. OF 2005 [@ SLP(C) NO. 10511 of 2005] WITH I.A. NO.3 IN C.A. @ SLP (CIVIL)
NO.10511 OF 2005 WITH CIVIL APPEAL NO. OF 2005 [@SLP(C) NO. 7453 of 2005] WITH
I.A. NO.2 IN C.A. @ SLP (CIVIL) 7453 OF 2005 WITH CIVIL APPEAL NO. OF 2005 [@SLP
(C) NO. 7451 of 2005] WITH I.A. NOS.2-3 IN C.A. @ SLP (CIVIL) NO.7451 OF 2005 WITH
CIVIL APPEAL NO. OF 2005 [@SLP(C) NO. 8362 of 2005] WITH I.A. NO. 2 IN C.A. @ SLP
(CIVIL) NO.8362 OF 2005 AND CIVIL APPEAL NO. OF 2005 [@SLP(C) NO. 8378 of 2005]
WITH I.A. NO.2 IN C.A. @ SLP (CIVIL) NO.8378 OF 2005 S.B. SINHA, J :
Leave granted.
In the early eighties the workmen of the cotton mills situated in the town of Bombay went on a
strike resulting in closure of 58 textile mills which together occupied lands measuring about 600
acres. Out of the said 58 mills, 25 belonged to the National Textile Corporation and 33 to private
parties.
In terms of the Maharashtra Regional & Town Planning Act, 1966, the Development Control
Rules (DCR), 1967 were framed. The State Government took a policy decision to amend the
DCR wherefor suggestions/ opinion from the public were invited. In the year 1991, Development
Control Regulations, 1991 were framed; Regulation 58 whereof permitted modernization of mills
and development of surplus mill lands in the manner specified therein. It also provided for
development of mill lands as a part of BIFR approved rehabilitation schemes and also for
modernization and shifting thereof.
The said Regulation 58 sought to deal with the lands appertaining to cotton textile mill pursuant
whereto each of the mill owners could give one of the options out of the following:

(i) The mill owners could continue to operate their mills even though it was running into losses.
This was the status-quo option which entailed no land being surrendered to MHADA, public
greens;
(ii) The second option entailed retaining the outer shell of the mill structures and building
commercial structures within the mill structure;
(iii) The third option entailed two steps. The first step was raising of construction within the old
structure and the second step was to construct on the part of open spaces;
(iv) The fourth option ensured demolition of the entire old structures and sharing the entire mill
lands in approximately three equal proportions. The first part would remain with the mill owner
which he would be entailed to redevelop. The second share would go to MHADA and the third
share would go to public greens.
Pursuant to or in furtherance of the said regulation, only two mills exercised the second option
and three mills the third one. Nobody opted for the fourth as in terms thereof the mill owners
were required to surrender a major portion of their land. As allegedly, the said regulation did not
work satisfactorily as no significant amount of land either for public green or for MHADA came
to be surrendered, it was not implemented.
It is stated that some mills endeavoured to develop the lands in accordance with the said
regulation but the same did not achieve the purpose for which the Regulation 58 was brought
into force. In the aforementioned situation, as would be noticed supra, Regulation 58 was
amended in 2001.
The Respondents filed a writ petition in the Bombay High Court questioning the validity of the
said regulation. Some interim orders have been passed therein which are in question in these
appeals.
The Appellants contend :
(i) As the scheme containing 1991 regulations was not found to be workable, committees were
appointed and in furtherance of their recommendations a new Regulation 58 was introduced in
the year 2001. The new Regulation 58 envisaged a coherent development of the various mills
and their lands in Mumbai and also ensured that the proceeds of such development are utilized in
accordance with either the schemes promulgated by BIFR and/ or for the satisfaction of the dues
of the workers and/ or for the satisfaction of the large outstanding public monies by way of loans
from financial institutions and banks under the supervision of a Monitoring Committee.
Regulation 58 of 2001 while providing for a coherent development also took care of the
provision for open spaces, public amenities and public housing. The entire development is to be
overseen by a Monitoring Committee which over see an escrow account to ensure financial
accountability, their payment to workers/ financial institution etc. and is headed by a retired High
Court Judge appointed under the said Regualtion 58 of 2001. Pursuant to or in furtherance of the
new regulation, the mill owners allegedly borrowed huge sums of money, i.e., Rs. 2002 crores

from the banks and financial institutions to pay of the dues of the workers and also the dues of
the others.
(ii) Bombay Dyeing & Manufacturing Co. Ltd. alone after taking advances from the financial
institutions paid Rs. 120 crores to the workers and is committed to pay a further sum of Rs. 50
crores.
(iii) Within a span of four years since coming into force of the 2001 Regulations, third party
rights have been created, sanctions have been obtained for modernization of scheme and the
parties have altered their position to a large extent.
The said regulation of 2001 was clarified in the year 2003. With a view to have a re-look at
Regulation 58, a nine member committee with Shri Deepak Parekh, Chairman, HDFC as its
Chairman was appointed; the terms of reference whereof are:
"(1) To examine the feasibility of an integrated development of mills land.
(2) To study the existing DCR and suggest ways so that enough land is made available for open
use/ public housing without jeopardizing workers/ financial institutions interests."
However admittedly no recommendation has been made by the said committee nor its term has
been extended.
The first Respondent is a public charitable trust registered both under the Bombay Public Trust
Act, 1950 as also a society registered under the Societies Registration Act. Its aims and objects
inter alia are to look after environment in all aspects and it had been carrying activities therein.
The Respondent filed a writ petition on or about 18th February, 2005 in the nature of a Public
Interest Litigation in the High Court of Judicature at Bombay praying inter alia for the following
reliefs:
"(a) For an appropriate writ, order or direction striking down the impugned order dated 20th
March, 2001 (Exhibit "C", hereto) and consequent amendment to DC Regulation 58, in
particular, Clauses A-6 and C-1 (5) of Schedule 1 of the impugned order dated 20th March, 2001
as ultra vires the MRTP Act, illegal, unconstitutional, void ab initio and non est;
(b) For a writ of mandamus, or a writ in the nature of mandamus or any other appropriate writ,
order or direction, ordering and directing the 1st and 2nd Respondents (and their servants, agents
or officers):
(i) to withdraw/ cancel the impugned order dated 20th March, 2001 and the consequent
amendment to DCR 58;
(ii) to take such action as is necessary in law to amend DCR 58 to ensure that the total amount of
space available for redevelopment in respect of which the percentage wise allocations are to be
determined, is the open land and the land available after demolition of existing structures;

(iii) to forbear and desist from granting any permission, in accordance with amended DCR 58
(including to Respondent Nos. 3 and 4) for the redevelopment of the mill lands;
(iv) restraining them from in any way acting in furtherance of the report submitted by NTC and
prepared by "Team One".
(c) For a writ of mandamus or a writ in the nature of a writ of mandamus directing Respondent
Nos. 1 and 2 (and their servants, agents or officers) to undertake preparation of plan for
comprehensive development of appropriately delineated Textile Mill District so as to provide for
the comprehensive development of these mill lands in an integrated manner in furtherance of the
recommendations made by the Charles Correa Expert Committee Report submitted in August,
1996;
(d) That pending the hearing and final disposal of this petition, Respondent Nos. 1 and 2 should
be restrained by an appropriate writ, order direction or injunction from granting any permission
or taking any action pursuant to permission already granted for the redevelopment of mill lands
(including to Respondent Nos. 3 and 4) in pursuant of the provisions of amended DCR 58;
(e) That pending the hearing and final disposal should be ordered and directed by the Hon'ble
Court to produce on affidavit all the material documents and information that has been submitted
to Respondent Nos. 1 and 2 by Respondent Nos. 3 and 4 as part of their application for
permission to develop the said land or any part thereof and any other material and information
available to Respondent Nos. 1 and 2 which it has considered / likely to consider in relation to
the grant of permission to Respondent Nos. 3 and 4 for the development of the said mill land;
(f) That pending the hearing and final disposal of this petition, Respondent Nos. 1 and 2 should
be ordered and directed by this Hon'ble Court to produce on affidavit all the material documents
and information that has been submitted to Respondent Nos. 1 and 2 by privately owned mills as
part of their applications for permission to develop their respective textile mill lands, and any
other material information and documents that Respondents Nos. 1 and 2 considered in relation
to the grant of permission to them for the development of their respective mill lands;
(g) That pending the hearing and final disposal of this petition, Respondent Nos. 1 and 2 should
be ordered and directed to appoint a Special Planning Authority or any other supervisory body/
committee to supervise the comprehensive / integrated development of mill lands, including
private mill lands (that fall within the purview of DCR 58), in furtherance of the
recommendations of the Charles Correa Expert Committee Report submitted in August, 1996;
(h) For ad-interim reliefs in terms of prayer clauses (d) to (g); and
(i) For such further and other reliefs and orders as this Hon'ble Court deem fit in the nature and
circumstances of this petition."
In the said writ petition, apart from the State of Maharashtra, the Municipal Corporation of
Mumbai, the Maharashtra Housing and Area Development Authority, National Textile
Corporation Maharashtra North and South Maharashtra were impleaded as Respondents. Before

the said High Court, a large number of mill owners and others who allegedly have invested a
huge sum on the lands of the Mill owners or otherwise interested in implementation of
Regulation 58 of 2001 filed applications for their impleadment as parties therein but the same
was opposed by the Respondents. The Applicants, however, were allowed to intervene.
It was, however, stated at the bar that whereas 6th April, 2005 was fixed for filing responses by
the interveners, but after hearing the matter for three days, viz., 29th to 31st March, 2005, the
impugned orders were passed.
Before the High Court, the National Textile Corporation inter alia contended that it had been
carrying on its activities in terms of a scheme framed by the BIFR and which has been approved
by this Court by an order dated 27.9.2002 in the following terms:
"We have been informed that BIFR has already formulated eight schemes which stand approved
by all concerned and agencies. But the Schemes as sanctioned by BIFR be implemented. The
special leave petition and the transfer petitions stand disposed of accordingly."
The National Textile Corporation contends that out of 25 mills 17/18 Mills have closed down.
Approximately 14,800 employees have been relieved. Payment of Rs. 643.94 crores have been
made to the employees.
It has further been contended that several financial institutions and others have acted pursuant to
or in furtherance of the said scheme. It is stated that negotiations for selling seven textile cotton
mills have been finalized and, thus, it was submitted that no stay should be granted.
The High Court passed two interim orders on 1st April, 2005. As regard National Textile
Corporation, it was directed:
"On behalf of the N.T.C. the learned Counsel submits that they should be allowed to proceed
with the sale of Jupiter Mills. The matter is pending before this Court. However, considering the
urgency which Counsel make out any further as N.T.C. has 25 mills the request for confirming
the sale can be agreed to, subject to the following conditions:
i) The NTC will file an undertaking in this Court, that on the Court passing an order on interim
relief they will comply with the order of the Court including if a situation arises of reserving the
land in the other mills for which development is sought in terms of the order that may be passed
by the Court. On such undertaking being filed, it is open to the NTC to confirm the sale of
Jupiter Mills."
It was further directed:
"ii) Considering that the matter has now been adjourned to 20.4.2005 the Respondent No. 2
Municipal Corporation directed not to approve any further lay outs, issue IOD, or CC without the
permission of this Court or till further orders."

It is not in dispute that although no argument was advanced in that behalf, the Division Bench by
a separate order directed the State as also the Bombay Municipal Corporation to file a large
number of documents under fourteen different heads.
The learned counsel appearing on behalf of the Appellants inter alia would submit:
(i) Keeping in view of the fact that the writ petitioners did not file any objection or suggestions
before Regulation 58 was given a concrete shape, it was not entitled to any interim relief.
(ii) Regulation 58 being a subordinate legislation, a public interest litigation should not have
been entertained questioning its validity.
(iii) In any event, as within the interregnum of four years, the Appellants as also the others have
invested a huge sum of money, the interim order ought not to have been passed as they would
affect the interests inter alia of (i) the workers, (ii) the financial institutions, (iii) the mill owners;
and (iv) the third party purchasers.
(iv) No interim order in any view of the matter could have been passed without impleading the
interested parties and permitting them to file their affidavits.
(v) Several parties have obtained lay out, IOD or commencement certificates for different stages
and in that view of the matter if the interim order is allowed to operate, the same would result in
great hardship.
The learned Solicitor General appearing on behalf of the State of Maharashtra further submitted
that if the State of Maharashtra is asked to carry out the directions of the High Court as regard
filing of the documents, they will be put to a great hardship as truck loads of documents will
have to be brought before the High Court.
Mr. Parasaran and Mr. Rohtagi, learned senior counsel appearing on behalf of the National
Textile Corporation would contend that keeping in view of the fact that in respect of seven mills,
negotiations have been entered into, they should be allowed to be sold off and in the event, the
writ petition succeeds, the order of the court can be complied with by adjusting vacant land
belonging to the other mills.
Mr. Iqbal Chagla, learned senior counsel appearing on behalf of the writ petitioner-Respondents,
on the other hand, would contend that in terms of the 1991 Regulations, at least 200 acres out of
600 acres of land situate in the middle of the city would have been made available providing for
large space for the inhabitants of the town and further 200 acres of land would have been
available to MHADA for construction of residential houses for the weaker sections. Integrated
development of town of Bombay, the learned counsel would contend, is imperative having
regard to the fact that whereas in other metros, three to four acres of open space is available for
one thousand residents, in the town of Mumbai, it is only 0.03 acres per thousand. It was
contended that in terms of Section 37 of the Maharashtra Regional & Town Planning Act, 1966,
the State of Maharashtra itself imposed a ban in 1996 on constructions on the ground that no
final decision had been taken in that behalf and in that view of the matter there is absolutely no

reason as to why the impugned order cannot be sustained in as much as the validity of
Regulation 58 has been questioned in the writ petition. It was pointed out that the State of
Maharashtra itself issued clarification of 2001 Regulations in March, 2003 in terms whereof
allotment in favour of MHADA came to an end. It had been pointed out that Bombay Municipal
Corporation and MHADA had adopted resolutions asking the State Government to have a relook
in the matter and in January, 2005, the State appointed a committee therefor. In any event, the
learned counsel would contend that the High Court by reason of the impugned order having not
directed stoppage of constructions or any other activity in relation whereto agreements have been
entered into or requisite sanctions have been granted, the impugned orders should not be
interfered with.
The learned counsel would urge that the undertaking directed to be given by the National Textile
Corporation is commensurate with the suggestion given by Mr. Parasarn before this Court.
This Court at this stage is concerned with an interim order passed by the High Court. The writ
petition is still to be heard. Affidavits between the parties are yet to be exchanged. The objection
as regard maintainability of the writ petition is also required to be finally determined by the High
Court itself. This Court at this stage cannot, thus, enter into all the contentious questions raised in
these appeals. But, there cannot be doubt or dispute whatsoever that before an interim order is
passed and in particular a public interest litigation, the court must consider the question as regard
existence of a prima facie case, balance of convenience as also the question as to whether the
writ petitioners shall suffer an irreparable injury, if the injunction sought for is refused. The
courts normally do not pass an interlocutory order which would affect a person without giving an
opportunity of hearing to him. Only in extreme cases, an ad interim order can be passed but even
therefor, the following parameters as laid down by this Court in Morgan Stanley Mutual Fund
etc. vs. Kartick Das etc. [(1994) 4 SCC 225] are required to be complied with:
"As a principle, ex parte injunction could be granted only under exceptional circumstances. The
factors which should weigh with the court in the grant of ex parte injunction are
(a) whether irreparable or serious mischief will ensue to the plaintiff;
(b) whether the refusal of ex parte injunction would involve greater injustice than the grant of it
would involve;
(c) the court will also consider the time at which the plaintiff first had notice of the act
complained so that the making of improper order against a party in his absence is prevented;
(d) the court will consider whether the plaintiff had acquiesced for sometime and in such
circumstances it will not grant ex parte injunction;
(e) the court would expect a party applying for ex parte injunction to show utmost good faith in
making the application.
(f) even if granted, the ex parte injunction would be for a limited period of time.

(g) General principles like prima facie case, balance of convenience and irreparable loss would
also be considered by the court."
[See also Andhra Bank Vs. Official Liquidator and Anr., 2005 (3) SCALE 178] The courts while
passing an order of interim injunction must also consider the parameters of a Public Interest
Litigation as laid down by this Court in Dr. B. Singh Vs. Union of India and Others [(2004) 3
SCC 363] and Dattaraj Nathuji Thaware Vs. State of Maharashtra and Others [(2005) 1 SCC
590].
The courts, however, have to strike a balance between two extreme positions, viz., whether the
writ petition would itself become infructuous if interim order is refused, on the one hand, and the
enormity of losses and hardships which may be suffered by others if an interim order is granted,
particularly having regard to the fact that in such an event, the losses sustained by the affected
parties thereby may not be possible to be redeemed.
In Deoraj vs. State of Maharashtra and Others [(2004) 4 SCC 697] this Court opined:
"12. Situations emerge where the granting of an interim relief would tantamount to granting the
final relief itself. And then there may be converse cases where withholding of an interim relief
would tantamount to dismissal of the main petition itself; for, by the time the main matter comes
up for hearing there would be nothing left to be allowed as relief to the petitioner though all the
findings may be in his favour. In such cases the availability of a very strong prima facie case of
a standard much higher than just prima facie case, the considerations of balance of convenience
and irreparable injury forcefully tilting the balance of the case totally in favour of the applicant
may persuade the court to grant an interim relief though it amounts to granting the final relief
itself. Of course, such would be rare and exceptional cases. The court would grant such an
interim relief only if satisfied that withholding of it would prick the conscience of the court and
do violence to the sense of justice, resulting in injustice being perpetuated throughout the
hearing, and at the end the court would not be able to vindicate the cause of justice. Obviously
such would be rare cases accompanied by compelling circumstances, where the injury
complained of is immediate and pressing and would cause extreme hardship. The conduct of the
parties shall also have to be seen and the court may put the parties on such terms as may be
prudent."
In Raunaq International Ltd. Vs. I.V.R. Construction Ltd. and Others [(1999) 1 SCC 492], this
Court held that in appropriate cases, the petitioners should be put on appropriate terms such as
providing an indemnity or an adequate undertaking to make good the loss or damage in the event
the PIL filed is dismissed. [See also Guruvayoor Devaswom Managing Committee and Another
Vs. C.K. Rajan and Others, (2003) 7 SCC 546].
The Courts are also required to consider the decisions of this Court relating to public interest
litigation vis-`-vis reason of delay in bringing the same as noticed by this Court in Chairman &
MD BPL Ltd Vs. S.P. Gururaja and Others, (2003) 8 SCC 567] in the following terms:
"In the facts and circumstances, we do not find that the Board and the State had committed any
illegality which could have been a subject-matter of judicial review. The High Court in our

opinion committed a manifest error insofar as it failed to take into consideration that the delay in
this case had defeated equity. The allotment was made in the year 1995. The writ application was
filed after one year. By that time the Company had not only taken possession of the land but also
made sufficient investment. Delay of this nature should have been considered by the High Court
to be of vital importance."
[See also Narmada Bachao Andolan Vs. Union of India and Others, (2000) 10 SCC 664 at 762
and R & M Trust Vs. Koramangala Residents Vigilance Group and Others, (2005) 3 SCC 91 at
112-13] So far as transactions relating to seven mills belonging to National Thermal Corporation
are concerned, including sale of Jupiter Mills, it is not in dispute that transactions have reached a
final stage. The purchasers of Jupiter Mills have already paid 16 crores and a sum of Rs. 376
crores would pass hands if the transaction is completed. If the transactions in respect of the mills
are not allowed to be completed, the scheme framed by the BIFR would come to a stand still
resulting in accrual of interest payable by the National Textile Corporation to the financial
institutions besides other hardships which may be caused to various other persons including the
workers.
We, therefore, having regard to the facts and circumstances of this case as also the law operating
in the field, are of the opinion that interest of justice would be sub-served if the National Textile
Corporation is permitted to complete the transactions in terms of the scheme framed by the BIFR
but the same shall be subject to the conditions that in the event, the writ petition ultimately
succeeds, the vacant land available from other mills, if necessary, shall be offered by way of
adjustment.
In some cases, the State might have sanctioned DCR. Yet in some other cases, IODs might have
been obtained. Yet again, in some cases, Commencement Certificates might have been granted.
In such cases, the statutory authorities shall process applications or further applications for grant
of sanction required for commencement and/ or continuation of structures strictly in accordance
with law. It is stated that in some cases such applications may be entertained although the period
of lease has expired. We do not think that the statutory authorities shall be so callous so as to
grant permission in favour of a person who does not have ownership over the land in question.
We furthermore have no doubt that the scheme, rules, regulations and byelaws framed under the
provisions of Maharashtra Regional & Town Planning Act, 1966 shall be strictly complied while
granting permission. We have furthermore no doubt that the committee appointed in terms of the
regulation shall grant its approval only in accordance with the extant regulations. The Appellants
and/ or interveners herein, however, before creating any further third party interest or before
raising any constructions pursuant to or in furtherance of any fresh lay out, IODs or CCs must
put an advertisement in two newspapers having wide circulation in Mumbai; one in English and
the other in Marathi Vernacular clearly indicating the same. If any agreement is to be entered into
in future or any third party right is to be created, a stipulation shall be made therein that the
enforcement thereof shall be subject to any other or further order which may ultimately be
passed by the High Court in the pending proceedings.
Any further constructions and/ or creation of any third party rights by the mill owners will be at
their own risk wherefor they would not claim any equity whatsoever and furthermore the same
shall be subject to the orders of the Court. However, any new application for grant of approval of

any lay outs, issue of IODs or commencement certifications may be processed but no
construction shall be carried on pursuant thereto or in furtherance thereof.
It appears that there exists some dispute between two rival trade unions. Their interse disputes
representing different sections of workers, if any, may be determined by an appropriate forum in
an appropriate proceeding.
We are informed that the Division Bench of the Bombay High Court had fixed hearing of the
writ petition in the last week of August, 2005. We would request the High Court to consider the
desirability of preponing the date so that the writ petition may be heard out and disposed of at an
early date and preferably by 31st July, 2005.
The impleaded parties and/ or interveners may file their affidavits before the High Court within
three weeks from date.
The State of Maharashtra and the Bombay Municipal Corporation shall place all the relevant
documents before the High Court and in the event, it is found at a later stage that they have
withheld any document which is relevant, the High Court would be at liberty to draw adverse
inference against them or pass such other order or orders as may be found necessary. We have
passed this order having regard to the fact that the directions to produce documents have been
passed without hearing the parties and without taking into consideration the hardship which may
be faced by the State and/ or Bombay Municipal Corporation.
We, by our order dated 18th April, 2005 directed the matter to be placed on 23rd August, 2005
for hearing but keeping in view of the fact that in these appeals we were called upon to deal with
an interim order, we are of the opinion that no purpose would be served in keeping the matters
pending. We, therefore, dispose of these appeals and the intervention applications on the
aforementioned term