In Rakesh Sinha v Manoj Saluja (21/2/2018), the Court refused to continue an interim injunction preventing the sale of business premises.
The applicant had borrowed money from the respondent and had granted a second charge over his business premises. The respondent sought repayment and appointed a receiver of the premises under a power of appointment in the legal charge which could be exercised if the borrower was in default. The applicant applied for an interim injunction to restrain the sale of the premises at auction on the basis that the borrowed monies had been repaid.
Applying American Cyanamid principles:
– The applicant had failed to show a “good arguable case” that the indebtedness had been paid off.
– There was no serious issue to be tried on the applicant’s claim that he had completely repaid the respondent’s loans and that there was nothing subject to the legal charge.
The power to appoint the receiver had been validly exercised and there was no justification for continuing the injunction.
The applicant failed to show that the property was likely to be sold at an undervalue, or that he would have been able to give a cross-undertaking in damages.
Accordingly, the Court refused to continue the interim injunction leaving the receiver free to sell the property at auction.