019-SLLR-SLLR-1987-2-KUMARASENA-v.-DATA-MANAGEMENT-SYSTEM-LTD..pdf
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KUMARASENA
v.
DATA MANAGEMENTSYSTEMS LTD.
COURT OF APPEAL
RAMANATHAN, J AND GOONEWARDENA, J
A. REV APPLICATION No. 188/87WITH C. A. (LA ) No 22/87
C. COLOMBO No 2513/SPL.
JUNE 1,2.3, 15 AND 16. 1987.
Interim Injunction-Application for dissolution of interim injunction taken up togetherwith trial-Enhancement of security-Compensation-Civil Procedure Code, section 667
Bias- Transfer of case to another judge for disposal.
Code of Intellectual Property Act, No 52 of 1979-Patent-Complaint of infringementby registered owner of Sinhala Word Processor
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In an action for the infringement of a patent the plaintiff who was the registered owner,registered by the Registrar of Patents and Trade Marks in respect of a Sinhala WordProcessor moved for and obtained an interim injunction on the deposit ofRs. 10,000 as cash security. The defendant filed an application for dissolution of theinterim injunction and it was agreed that the trial and the application for dissolutioncould be had together. At the inquiry he complained that as his losses were very highand the plaintiff vyas not a man of means, the security ordered was insufficient TheDistrict Judge refused the application to discharge the interim injunction but enhancedthe security to Rs. 750,000
Held-
fl) Security is ordered against compensation that may be ordered under S. 667 C.P.C.
Section 667 C P.C. contemplates two situations: (1) When the injunction wasapplied for on insufficient grounds whatever the result of the case may be; {2) In thecourt's view there was no probable ground for applying for it where the result of theaction is against the party obtaining the injunction.
Compensation can be awarded firstly on the application of the party affected by theinjunction and secondly by the Court's decree.
Where the question of the interim injunction was kept back for decision along withthe trial it was wrong to .have enhanced the security because it is only after anassessment of all the material that the court could have come to the conclusion that theinjunction had being applied for on insufficient grounds.
Re bias it is not only that the Judge should be impartial, he must appear impartial. Inconsidering whether there was a real likelihood of bias, the court does not look at themind of the justice himself but at the impression which would be given to other people.Even if he was as impartial as could be nevertheless if right minded persons would thinkthat in the circumstances there was a real likelihood of bias on his part, then he shouldnot sit. There must appear to be a real likelihood of bias. Surmise or conjecture is notenough. Will reasonable people think the judge favoured one side unfairly?
Cases referred to:
11) Don Mathes v. Dissanayake -[1919] 6 C. W.R. 358.
Marikarv. Bastian ~ 11916] 3 C.W.R 154.
R (Ellis) & Co Dublin JJ -[1894] 2 I R 526.
Ranagiri and others v Piyadasa and others -C. A. Application No 2026/79C.A. minutes of 28.5.1980.
Perera and others v. Hasheem and others – 1 Sri Kantha Law Reports 133.
Marcus v. Attorney-General-C.A. Application No. 9/84. CA Minutes of 4.4.84.
Hannam v Badford C C -[1970] 1 WLR 937. 945
Lesson v General Medical Council -[1889] 43 Ch. D 366. 384
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R. v. Sussex JJ ex p. M.C. Carthy-[1924] 1 KB 256, 259.
Frome United Otaris v Bath J J -[1926] AC 586, 618.
Rex v. Camborne Justices ex P Pearce,-[ 1955] 1 OB 41, 53.
Metropolitan Properties Co, (F C C Ltd)vLannon-'[1968]3AIIER304
APPLICATION for Revision from order of the District Judge of Colombo
K Kanag Iswaran with-S. Mahenthiran and Nithi Murugesu for plaintiff-petitionerK N. Choksy P. C. with /. S. de Silva and N. Hatch for defendant-respondent
Cur. adv vuit.
July 16, 1987
GOONEWARDENE. J.
The plaintiff came into the District Court complaining of aninfringement of a patent of which he claimed' to be the registeredowner. Such patent was he averred one granted under the Code ofIntellectual Property Act No 52 of 1979 by the Registrar of Patentsand Trade Marks and with respect to a Stnhala Word Processor. Hesought a permanent injunction restraining the defendant frominfringing this patent and an interim injunction in like terms. On hisex parte application the Court by its order of 6th-December 1985granted such interim injunction on deposit of a sum of Rs. 10,000 assecurity. Upon such injunction being issued and communicated to thedefendant the latter filed petition and affidavit (with annexes) seeking adissolution thereof and an. Order Nisi was entered in terms of theprayer to such petition. The defendant also filed its answer with thesepapers. The plaintiff objected to the dissolution of the interiminjunction and therefore to the Order Nisi being made absolute:
Moving on, without dwelling upon other proceedings had of norelevance to the present application, it would suffice to state that thetrial of the action and the matter of the application of the defendant fora dissolution of the interim injunction were taken up for disposaltogether, the defendant in the meanwhile having filed an amendedanswer. That parties agreed to this course, counsel for both sidesconceded at the hearing before us and this is independently borne outon an examination of the issues upon .which the trial was to proceed(vide for example issue No. 22).
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The trial commenced before the Additional District Judge ofColombo on 29th July 1986 with the plaintiff giving evidence. Aftersome dates of hearing while the plaintiff was under cross examinationthere was a change of Judge as the proceedings show and on the16th of October 1986 further proceedings commenced before theincoming Judge with the parties agreeing to adopt the earlier evidencerecorded. On the same day and at the conclusion of the plaintiff'sevidence Counsel for the defendant is seen tor have raised twoquestions, firstly as to the maintainability of the interim injunction andsecondly as to the adequacy of the security upon which suchinjunction had been granted. Oral submissions on these two questionshad been made on 27th January 1987 followed by writtensubmissions and on the 12th of February 1987 the District Judgemade his order. He refused to dissolve, at that stage, the interiminjunction and since that part of the order is not challenged, it need notconcern us here. He however enhanced the security of Rs. 10,000ordered initially as a condition for the issue of the interim injunction byan additional sum of Rs. 750,000, to be deposited on or before the19th of February 1987 failing which the interim injunction was tostand discharged with immediate effect upon such failure. It is unclearwhether this amount of Rs. 750,000 was to be furnished in cash or byhypothecation of property, but the use of the word 'deposit' in twoplaces in the Judge's order would tend to suggest the former. Briefly,the reasons for the enhancement of the security as stated by theJudge were that the injunction obtained ex parte on the inadequate•security of Rs. 10,000 had the effect of causing immense hardship tothe defendant, that it was the duty of the Court to ensure that noinjustice was caused'to a party and that if the security was notenhanced section 667 of the Civil Procedure Code would be renderednugatory and meaningless.
Consequently, the plaintiff has moved this Court in Application C. A.188/87, inter alia to have this part of the District Judge's orderrevised. He has also made a parallel application C. A. L. A. 22/87seeking leave of this Court to appeal against such order.
Although the objections filed by the defendant in the RevisionApplication C. A. No. 188/87 (in which the plaintiff successfullyobtained an order staying the operation of the District Judge's ordercomplained of relating to the enhancement of the security) challenged
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the right of the plaintiff to seek relief by way of revision or to obtain anyrelief upon such application. At the hearing before us it was agreedthat the application, for leave to appeal was to be treated as if leavehas been granted and it and the revision application be taken up anddisposed of together. Counsel agreed that the questions before thisCourt were thus reduced to two in number, that is, firstly whether theorder enhancing security could be allowed to stand and secondlywhether further proceedings in the District Court should continuebefore the same District Judge or alternatively be taken out of hishands, on both of which Counsel for the plaintiff contended he wasentitled to succeed.
Counsel for the respondent sought to support the order of theDistrict Judge and contended that the evidence of the plaintiff himselfrevealed that there was a sufficient basis to justify the enhancement ofsecurity. He contended that this evidence shows that the plaintiff hadalready sold and assigned his patent right thus depriving himself of acause of action (if he had one) upon which he could have come toCourt, but as he conceded at a later stage of his argument this was amatter properly the subject for decision at the conclusion of the trial.He also stressed that this evidence showed that while the plaintiff hadnot sold even a single word processor to which the patent related, theplaintiff's admission was that he, not being possessed of assets,would be unable to pay the massive compensation claimed by thedefendant if so ordered by the Court. Counsel's contention thereforehad to be understood to be that these items of evidence rendered itwithin the competence of the District Judge to enhance the security inthe manner he did. He also contended that the decision in the case ofDon Mathes v. Dissanayake (1) referred to by the District Judgejustified this step. In that case the plaintiff who filed an action topartition a land sought and obtained an interim injunction upon filinghis plaint supported by an affidavit, on the basis that the. 11thdefendant who was restrained by such injunction had been gemmingon the land. The effect of such injunction which was issued withoutsecurity was to restrain such gemming. The 11th defendant theincumbent of a Buddhist temple-in that area together with the 12thdefendant its trustee, filed an affidavit which stated that the land wasthe sole property of the temple and had been possessed by those incharge of it for over 50 years, and that the plaintiff and the otherparties shown as co-owners had no interests whatsoever in the land.The affidavit stated that gemming by the temple had been going on
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uninterruptedly for several years and stoppage of such operationwould cause great loss to the temple. It was stated that the plaintiffwas not possessed of any property and that he had filed the action atthe instigation of others. On this application the 12th defendantmoved that the plaintiff be ordered to furnish security in connectionwith the injunction. The District Judge after consideration of theapplication ordered security in Rs. 1,000 to be given by a certain date' at the risk of the injunction being dissolved upon failure. In an appealtaken against this order it was conceded by counsel for the plaintiffthat section 666 of the Civil Procedure Code would justify the Courtrequiring security if the injunction was to be continued. He howeverattacked the procedure by which this security was sought. DeSampayo, J. in holding that the procedure adopted was not of much
consequence (at page 360) said " I think the
District Judge was within his rights in requiring security to be given. Imay add that the practice recognised in our Courts on injunctionsbeing issued includes the requirement of security in a proper case, andas an instance of this Mr. Keuneman for the respondent referred us tothe case of M'arikar v. Bastian Appuhamy (2). As the order appealedfrom appears on the whole reasonable and in accordance with thepractice, I think the appeal must be held to fail, and must be,therefore, dismissed with costs".
This case Counsel for the plaintiff contended can scarcely beconsidered, having regard to the circumstances there, as an authorityfor the course adopted by the District Judge in the circumstances ofthe instant case. It was one where the party affected sought not asappears from the judgment a dissolution of the injunction, but ratheras sole relief the imposition of a condition upon which the injunctionwas to continue to be effective, namely an order for the deposit ofsecurity. The papers filed in the instant case do not reveal that anysuch relief was asked for. What was sought here was only adissolution of the injunction and there is in those papers no complaintof any inadequacy of the security ordered. It is one thing for a personrestrained by an injunction, to make the solitary complaint that theinjunction issued without deposit of a security should not be allowedto remain unless some reasonable security is provided and for theCourt to so order; it is a different thing for a person affected by theinjunction issued on deposit of a stated sum as security to ask for itsdissolution as the only relief, on the basis that such injunction should
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not be allowed for reasons urged to stand and in such a case for theCourt to enhance the security, the inadequacy of which never formedthe subject of complaint upon the papers filed for dissolution. I am inagreement that that case constitutes no authority for the courseadopted by the District Judge, taking into account the prevailingcircumstances here.
The security, which De Sampayo, J, said is countenanced bypractice upon the giving of which an interim injunction is granted, mustin my understanding of the scheme of the sections contained inChapter XLVIII of the Civil Procedure Code, be intended to be withrespect to a possible award of compensation made under section 667of the Civil Procedure Code. I do not think that it can have reference toanything else. The District Judge himself appears to have thoughtalong similar lines and indeed Counsel for the defendant at the hearingbefore us also formulated his arguments on that basis. In that viewsuch compensation is as section &67 spells-out, that which the Courtdeems reasonable for the expense or injury caused to the partyaffected by the injunction obtained in circumstances where either itappears to Court that the injunction was applied for ojt insufficientgrounds or if after the issue of the injunction the action is dismissed orjudgment is given against the party obtaining such injunction by defaultor otherwise and it appears to the Court that there were no probablegrounds for applying for the injunction.
Section 667 reads thus:-
"If it appears to the Court that the injunction was applied for oninsufficient grounds, or if, after the issue of an injunction which ithas granted, the action is dismissed or judgment is given against theapplicant by default or otherwise, and it appears to the Court thatthere was no probable ground for applying for the injunction, theCourt may, on the application of the party against whom theinjunction issued,'award against the party obtaining the same in itsdecree such sum as it deems a reasonable compensation for theexpense or injury caused to such party by the issue of the injunction.An award under this section shall bar any action for compensation in• . respect of the issue of the injunction".
An examination of the section shows that compensation can beordered in two situations, that is, either where in the Court's view theinjunction was applied for on insufficient grounds (whatever the resultof the case may be) or in the Court's view there was no probable
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ground for applying for it. in cases where the result of the action isagainst the party obtaining the injunction. In either eventuality it isseen, such compensation can be awarded firstly on the application ofthe party affected by the injunction and secondly by the Court'sdecree (which is the formal expression of its final adjudication).
In the circumstances of this case where it was agreed that thequestion of whether the interim injunction should be allowed to remainor not was to be decided at the end of the trial I find it difficult tounderstand how the District Judge then came to make the order hedid. The first situation contemplated by Section 667. a stage when animpression gets formed in the mind of the Court that the injunctionwas applied for on insufficient grounds could not have, I think, beenreached when only the plaintiff had given evidence, in view of theagreement of parties that this a part of the larger question whether theinjunction should be discharged could itself only have been reached atthe conclusion of the trial and indeed after issue No. 22 had beenanswered. The second situation contemplated by section 667, in anyevent upon its terms, could have arisen only if the plaintiff's actionfailed and in the instant case as the stage of giving judgment againstthe plaintiff (if that were to happen) had not arisen, it is the first uponwhich one's focus must be. On the question whether it could haveappeared to the Court that the injunction was applied for oninsufficient grounds, the material relied upon by the defendant tojustify the District Judge's order to increase the security, namely, theplaintjff's evidence that he could not pay compensation of themagnitude claimed by the defendant, that he was not a man ofmeans, that he was financed in this litigation by his present employer acompetitbr of the defendant and that he had not yet sold any wordprocessor in respect of which this patent had been issued, have nobearing. To my mind these items of evidence taken separately or incombination do not go towards fully answering the question whetherthe injunction was applied for on insufficient grounds. The answer tothat question, I am^/ the view, could have been had only upon anexamination of a1 !j;,e evidence bearing upon the larger questionwhether the injun //on should be allowed to stand or not and in thecircumstances of./ii? case where the parties had agreed to have thatmatter taken up along with the trial, only at the conclusion of.the trial.The District Judge in my view was over hasty in increasing the securitythe way he did and his order cannot be allowed to stand. Counsel forthe defendant argued that the Court in ordering security for the issue
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of an injunction exercises its inherent power and in the exercise ofsuch power the Court could well increase the security ordered.Without going into that question and whether or not the ordering orincreasing of security is’referable .to a Court's inherent power if thecontention of Counsel be correct the Court may have been justified inincreasing the security at a stgge when it was in a position to arrive ata finding that the injunction was applied for on insufficient grounds. Inthe usual kind of case where the question of the dissolution orotherwise of the interim injunction is gone into and decided at a pretrial stage’, that stage would be subsequent to such deci'sion. In theinstant case in view of the agreement of parties that such question ofdissolution and the trial be taken up and decided together, that stagewould be at the conclusion of the trial. That stage where the trial wasconcluded not having been reached here, in my view the DistrictJudge proceeded to increase the security at a time when he could nothave addressed’his mind to this vital question but was influenced’bythe other considerations which he appears to have thought aroseupon the evidence of the plaintiff.
To repeat therefore, the order enhancing the security could not havebeen made at any stage prior to that at which the Court could upon anassessment of all the material placed before it in that behalf, havebeen in a position to come to the conclusion that the injunction was'applied for on insufficient grounds. That stage, having regard to theprocedure adopted upon the agi eement of parties, I think could onlyhave been reached at the conclusion of.the evidence.
Counsel for the defendant contended that in the amended answerfiled the inadequacy of the security has been referred to. Materialpleaded in an answer, or amended answer as the case may be, wouldcome up for consideration only at the trial and decided after the trial.Upon the’course adopted by the defendant itself in pleading thisinadequacy, not in the papers filed for dissolution but in the amendedanswer, that question I think could have been resolved only at theconclusion of the trial. The order of the District Judge enhancing thesecurity therefore cannot stand.
*
The next question is the somewhat troublesome one as to whetherthere should be a transfer of this case to be continued before anotherJudge and a good part of our anxiety has centered around the impactof an order of this kind, having regard to the circumstances here, onthe mind and thinking not merely of this Judoe. but of all others
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engaged in exercising the judicial function, the content of which in anymeaningful sense must assure to Judges the jurisdiction to decide anymatter wrongly provided that such decision is taken honestly. Thebasis on which this other relief is sought is that in making the order he. did the District Judge demonstrated that a fair and impartial trialcannot be had before him. It is contended in the papers filed by .theplaintiff in "this Court that'the order of the District Judge is oppresiveand causes manifest injustice to him and that the Judge has prejudgedthe case in the sense that he has come to conclusions on the factswhich he himself has described as complicated, based solely on thesubmissions of Counsel before all the available evidence was beforehim. At the hearing before us Counsel for the plaintiff rested hisargument upon the position he took that the conduct of the DistrictJudge demonstrated that no fair and impartial trial was possible beforehim. He contended that in the mind of the plaintiff it was impossible tocontemplate that he would have a fair and impartial trial before thisparticular Judge. That submission however must be understood tomean not that such impression in- the mind of the plaintiff wassufficient to ask for this relief (Vide R (Ellis) v. Co Dublin J.J. (3)) wherethe Court was not prepared to accept that the feeling of the partycomplaining was the true test of this question but that the Courtobjectively examining the circumstances, would reach the conclusionthat such fear could reasonably have been generated in the mind ofthe plaintiff or indeed of any average reasonable person. What iscontended must be taken to be that the conduct of the District Judgein making this order on the first day on which he commenced to hearthis case, an order which the evidence of the plaintiff himself shouldhave made clear that he would find impossible to comply with takinginto account, the magnitude of the sum ordered, renders reasonablethe belief engendered in the mind of the plaintiff that he cannot have afair and impartial trial before this Judge-Counsel for the plaintiff cited in support of his argument the case ofRamagiri and Others v. Piyadasa and Others (4) while opposingCounsel referred us to the judgment in Perera and Others v. Hasheemand Others (5). In both these cases and in the case of Marcus v. •Attorney-General (6) the question of bias figured prominently andreference was made to English cases where two tests are said to havebeen formulated for disqualification on this ground, namely (a) the testof real likelihood of bias (b) the test of reasonable suspicion of bias. Aneffort must be made therefore to examine the basis of the claim ofdisqualification against its appropriate legal background.
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Paul Jackson in his book 'Natural Justice' 2nd Edition (at page 48)ventures to state with respect to 'real likelihood of bias’ and'reasonable suspicion of bias" thus: 'It will be suggested that the'somewhat confusing welter of authority' (per Widgery L.J. in Hannamv. Bradford C.C. (7)) does not indicate a genuine difference of opinionon the correct test to apply but rather the existence of a confusingvariety of ways of describing one test. The real difficulty is in applyingthe test to the facts of particular cases".
From a pecuniary interest in a litigation Paul Jackson says (in'Natural Justice' – ibid) arises one kind of bias known to the EnglishCommon Law, this type sometimes being described as bias giving riseto an interest. In this kind, he points out, disqualification is automaticand "the law does not allow any further inquiry as to whether or notthe mind was actually biased by the pecuniary interest" – per BowenL.J. in Lesson v. General Medical Council (8). However it is not allegedhere that the District Judge had this kind of interest.
Paul Jackson also points out in the same work that the EnglishCommon Law recognised a type of bias often described as a challengeto favour and arising from such causes as relationship to a party or awitness. It is. in this class of case, where the allegation of bias arisesfrom non-financial factors (which includes the challenge to favourtype) that the test for bias (whether 'real likelihood' or 'reasonablesuspicion' or as suggested, only one kind) has any application and it ishere I think that the words of Lord Hewart, C.J. in R. v. Sussex JJ expMcCarthy (9) that "It is of fundamental importance that justice shouldnot only be done but should manifestly and undoubtedly be seen to bedone" have relevance.
The concept that justice must be seen to be done was placed in theforefront of the argument of Counsel for plaintiff, his contention beingthat the conduct of the District Judge clearly militates against thisconcept. Since the effect of argument in the case is to take us into thisarea, that is what must be examined, and I think that that task issimplified if approached from the point of view suggested by PaulJackson that there is only one test or perhaps the simple testsuggested by Lord Carson, whether there was
"such a likelihood of bias as entitled
the Court to interfere" Frome United Dairies, v. Bath JJ (10). Inconsidering this concept it is well I think not to lose sight of thewarning of Slade J. in Rex v. Camborne Justices exp Pearce (11) with
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respect tothe erroneous
impression that it is more important that justice should appear to bedone than that it should in fact be done".
Much assistance as to the approach to be adopted is I think to befound in the words of Lord Denning M. R. in Metropolitan Properties v.Lannon (12) (at page 599) which in the contention of Paul Jackson arethose there that support his view that there is in reality only one test."In considering whether there was a real likelihood of bias, the Court
does not look at .the mind of the justice himselfIt does not look to
see if there was a real likelihood that he would or did in fact favour oneside at the expense of the other. The Court looks at the impressionwhich would be given to other people. Even if he was as impartial ascould be, nevertheless if right-minded persons would think that in thecircumstances there was a real likelihood of bias on his part, then he
should not sitThere must appear to be a real likelihood of bias.
Surmise or conjecture is not enough.There must be
Circumstances from which a reasonable man would think it likely or
probable that the justice.would, or did, favour one side unfairly
at the expense of the other. The Court will not enquire whether he did,in fact, favour one side unfairly. Suffice it that reasonable people mightthink he did".
A narrative of certain of the facts as led up to the order complainedof, even at the risk of repeating myself at places, is useful to facilitatetheir consideration in order to apply the single test set out above whichcommends itself to me. In adopting that test, I think, the confusionthat would otherwise arise as to which of the two tests (reasonablesuspicion of bias or real likelihood of bias) is applicable to this case(where the factual basis on which the ground of disqualification isbased is difficult and somewhat unusual) is avoided.
The plaintiff obtained this injunction ex parte and upon the materialaverred it was allowed on deposit of Rs. 10,000 as security. Thedefendant in its amended answer contended that as a result of thisinjunction it was suffering damage at Rs. 500,000 per month. Theplaintiff in giving evidence admitted that he did not have the means topay compensation of this magnitude if ordered, that he had assignedhis patent right to a competitor of the defendant and that he had nothimself sold a single such unit. The District Judge upon application bythe defendant, and not on his own initiative, examined two questionsasked of him as to the maintainability of the injunction and theadequacy of security. He held against the defendant and refused to
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discharge the injunction at that stage, thus in great measure dispellinga charge of lack of evenhandedness with respect to the two sides. Hehowever enhanced the security. In doing so it may well have been thathe misdirected himself as to the relevancy to the question before himof the facts on which he based his order and as to the correct positionin law. That by itself to my mind does not demonstrate bias oranything else that suggests that a fair and impartial trial cannot be heldbefore him.
To borrow certain of the words of Lord Denning, which alsodemonstrate the importance of the appearance of justice being done, Ido not think there ate circumstances from which a reasonable man(weighing these circumstances) would think it likely or probable thatthe Judge did on this occasion or would in the future favour one sideunfairly at the expense of the other.
I would desist therefore from making the order asked for that furtherproceedings in this case should not be taken by this Judge upon adirection of this Court to that effect. Any other order it must also, beobserved could open the flood gates to a multitude of similarapplications by parties dissatisfied with some incidental ordei made bya Judge or otherwise unhappy with the case continuing before himand anxious to take it elsewhere, although that is far from being whatimpels me to make this order.
It is however open to the District. Judge, if he thinks it prudent to doso having regard to the lack of confidence in his impartiality expressedby one of the parties, to disqualify himself and direct that furtherproceedings he had before another, taking also into account that if hewere to hold against the party so complaining at the conclusion of thetrial, he could lay himself open to a further charge of prejudice againstsuch party consequent upon such allegation being made.
The interim injunction ordered at the commencement will remain-tillthe conclusion of the trial upon the security of Rs. 10,000 directed tobe given.
The appeal is allowed to the extent set out above and the orderenhancing security made on 12th February 1987 is set aside. Thisorder will conclude both C.A. No. 188/87 and C.A.L.A. 22/87 butthere will be one order for costs fixed at Rs. 525 payable by thedefendant to the plaintiff.
RAMANATHAN, J.-l agreeAppeal allowed.
Order enhancing security set aside.