Step 1: Perpetual injunction concept.
Under Section 37–38 of the Specific Relief Act, a perpetual injunction can only be granted by a decree made at the hearing of the suit. It is based on the merits of the case, not just the demand of the party.
Step 2: Analyzing the options.
- (A) Demand of the party: Wrong, mere demand is insufficient.
- (B) Discretion of the court: Wrong, though court exercises discretion, it must be backed by merits.
- (C) Merit of the suit: Correct, the injunction is granted only when justified by facts and law.
- (D) None of the above: Wrong, since (C) is correct.
Step 3: Conclusion.
Thus, a perpetual injunction can only be granted on the merits of the suit.