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S.k. Gupta Prop, M/s. Rohini Times v. Hyderabad Allywn Limited

S.k. Gupta Prop, M/s. Rohini Times v. Hyderabad Allywn Limited

(High Court Of Delhi)

Civil Revision No. 516 of 1987 | 19-10-1987

Sunanda Bhandare, J.

1. This revision petition under Section 115 of the Code of Civil Procedure is directed against the order of the Senior Sub-Judge Delhi dated 30th June 1987 in R.C.A. No. 37/87.

2. The petitioner M/s Rohini Times was appointed as exclusive stockiest of the respondent for the Union Territory of Delhi for sale of watches by way of a memorandum of understanding between the respondent and the petitioner dated 1st August 1984. Clause 1 of the memorandum of understanding reads as follows:

1. This Memorandum of Understanding shall remain in force for a period of SIX MONTHS from the date of its execution. The principal reserves the right to terminate this understanding within this period with or without notice at any time, and without assigning any reason whatsoever.

The case of the petitioner is that this understanding continued till date and the appointment of the petitioner as a stockist was not terminated at any stage, however, the respondent committed breach of terms of agency and started marketing their products through various dealers in contravention of the terms of the agency. The petitioner, therefore, on 20th April. 1987 filed a suit for permanent injunction in the court Senior Sub-Judge, Delhi being Suit No. 220/87. Along with the plaint, the petitioner also filed an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure for an interim injection restraining the respondent from supplying watches to any other dealer in Delhi except through the plaintiff firm. By order dated 20th April 1987 the Sub-Judge, 1st Class, Delhi granted the interim injunction against the respondent even before issuing notice to the respondent. The respondent, therefore, moved this Court by way of a civil miscellaneous (main) petition under Article 227 of the Constitution of India. This Court by its order dated 24th April 1987 stayed this order dated 20th April 1987 passed by the Sub-Judge, however, at a subsequent stage directed the Sub-Judge to decide the case according to law after hearing the respondent. Thereafter, the Sub-Judge, 1st Class, Delhi by his order dated 8th May 1987 after hearing both the sides granted an injunction restraining the defendants from supplying watches directly or indirectly to other dealers in Delhi except through the plaintiff firm against cash receipts till the decision of the suit. The respondent felt aggrieved by this order and filed an appeal before the Senior Sub-Judge, Delhi. The Senior Sub-Judge, Delhi by his order dated 30th June 1987 allowed the appeal and reversed the order dated 8th May 1987 passed by the Sub-Judge, 1st Class, Delhi.

3. It was contended by the learned Counsel for the petitioner that the Senior Sub-Judge, Delhi was not right in observing that since compensation in money is an adequate relief, a suit for permanent injunction was barred under Section 4 1(e) of the Specific Relief Act 1963 (hereinafter referred to as the) and, therefore, it could not be held that a prima-facie case was made out for granting temporary injunction in a case like the present one. Learned Counsel submitted that since there was a negative covenant in the agreement, though the contract was terminable as envisaged under Section 14(l)(c), Section 41(e) of thewas not applicable and Section 42 of thewas applicable and injunction could be granted. Learned Counsel relied on International Oil Co. v. Indian Oil Co. Ltd, AIR 1969 Madras 423, Warner Brothers Pictures Inc. v. Nelson, (1936) 3, All. E R. 1963 and Marco Productions Ltd v. Pagola & Others, (1945) 1, All. E.R, 155 in support of his contention. He further submitted that since the present case falls under Section 42 of theonce the petitioner had made out a prima-facie case, the petitioner was entitled to get the interim injunction prayed for. Learned Counsel submitted that the communication terminating the arrangement alleged to have been sent by the respondent to the petitioner was not proved to have been received by the petitioner and, therefore, there was a prima-facie case to show that the memorandum of understanding was still continuing and the respondent had committed breach of the agreement. Learned Counsel referred to certain documents filed by the parties before the Trial Court as well as the first appellate court including a circular issued by the respondent on 1st August 1984 informing the dealers that the petitioner has been appointed as the sole stockiest for their product.

4. On the other hand, it was contended by the learned Counsel for the respondent that the suit for permanent injunction is barred under Section 41 (e) of the. Learned Counsel submitted that under Clause 1 of the agreement, the contract was terminable and the respondent had specifically terminated the contract by its letter dated 26.7.85. Thereafter, the respondent had been dealing through various other dealers since 1985 and the petitioner having chosen to move the court in 1987 was in any event not entitled to any interim injunction. Learned Counsel further submitted that since the petitioner could be compensated by money by way of damages the Trial Court was not right in granting the interim injunction. He submitted that the petitioner has already filed a suit for rendition of accounts in the High Court and the petitioner having availed of an alternative remedy the suit itself was not maintainable and, therefore, it could not be said that the petitioner had made out any prima-facie case. He, therefore, submitted that the first appellate court was right in reversing the order of the Sub-Judge, 1st Class, Delhi dated 8th May 1987. Learned counsel relied on M/s Bhojraj Kunwarji Oil Mill. & Ginning Factory & Another v. Yograjsinha Shankersinha Parihar & Others, AIR 1984 SC 1894 [LQ/SC/1984/254] and submitted that this Court would not ordinarily interfere in exercise of its revisional jurisdiction only on the ground that a different view on facts elicited was possible. He also relied on Modern Food Industries India Ltd. v. M/s Mr. Krishna Bottlers (P) Ltd. AIR 1984 (Delhi) 119 and submitted that in case it is found that if remedy by way of damages in a given case was more efficacious it is not reasonable to grant injunction even when negative stipulations can be enforced and injunction should be granted only in exceptional cases.

5. I find that the memorandum of understanding placed on record by the respondent Along with its counter-affidavit is not disputed by the petitioner. As per Clause 1 of the said memorandum, the appointment of the petitioner as a sole stockist was to remain in force for six months from the date of its execution and the respondent Principal had reserved the right to terminate this memorandum of understanding within this period with or without notice at any time and without assigning any reason whatsoever. Under Section 14(l)(c) of thea contract which is in its nature determinable cannot be specifically enforced. Since in the present case the contract was determinable under Clause 1 of the memorandum of understanding it is clear that it was a contract which is covered by Section 14(l)(c) of the. Now, under Section 41(e) of thean injunction cannot be granted in a suit filed to prevent the breach of a contract the performance of which would not be specifically enforced. Thus, once it is found that the contract cannot be specifically enforced because it is covered by Section 14(l)(c) of the Act, no injunction can be granted to prevent the breach of such a contract. Section 42 of the Act, however provides that where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied not to do a certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement. If there is a negative covenant in the agreement even if the affirmative agreement is hit by Section 41(e) of the Act, injunction can be granted for enforcing the negative agreement. I find no force in the contention of the learned Counsel for the petitioner that there is a negative covenant that the respondent will not appoint any other stockiest and that this negative covenant could be enforced by the petitioner by obtaining a permanent injunction restraining the respondent from appointing other dealers in the same area. From the perusal of the agreement in question I find that there is no negative covenant in the said agreement. If there had been a condition imposed on the petitioner that it will not be authorised stockist or dealer for any other watch company it could be said that there is a negative covenant as envisaged in Section 42 of the. But that is not so in the present case. The cases referred to by the learned Counsel for the petitioner also are not relevant for determination of the present case because the cases pertain to personal service contracts and not contracts of the type in the present case. It is well-settled that personal service contracts always stand on a different footing. In fact, even in England now the courts are taking a different view than the one expressed in the two English decisions cited by the learned Counsel for the petitioner. Now if a permanent injunction is barred under Section 41(e) of theit cannot be said that a prima-facie case is made out for a temporary injunction in the suit. Furthermore, even assuming the interpretation to Section 42 of thegiven by the learned Counsel for the petitioner isto be accepted, I am in respectful agreement with the observations of Talwar, J in Modern Food Industries India Limited (supra) and am of the opinion what even in such cases if remedy by way of damages is found to be efficatious the court should grant injunction only in exceptional cases. I do not think that the case in hand is one such exceptional case. Moreover, since a breach of the contract of agency can always be compensated in money, balance of convenience is also in favour of the respondent and it cannot be said that irreparable loss or injury will be caused to the petitioner. I, therefore, do not see any reason to reverse the impugned order of the lower appellate court. The petition is, therefore, dismissed with costs.

Advocate List
  • For the Petitioner R.K. Anand, Sr. Advocate, Y.K. Kapur, S.P. Sharma, Amit Khemka, Advocates. For the Respondent D.K. Kapur, Raman Kapur, B.D. Sharma, Advocates.
Bench
  • HON'BLE MS. JUSTICE SUNANDA BHANDARE
Eq Citations
  • AIR 1988 DEL 324
  • 34 (1988) DLT 27
  • 1987 (2) ARBLR 265 (DEL)
  • LQ/DelHC/1987/518
Head Note

A. Contract and Specific Relief — Specific Relief Act, 1963 — Ss. 14(l)(c), 41(e) and 42 — Injunction — When can be granted — Contract which is determinable — Suit for injunction to prevent breach of contract — When barred — Personal service contracts — Distinction between personal service contracts and other contracts — Held, if a permanent injunction is barred under S. 41(e) of the Act, it cannot be said that a prima facie case is made out for a temporary injunction in the suit — Further, even assuming the interpretation to S. 42 given by the petitioner is to be accepted, the courts should grant injunction only in exceptional cases — The case in hand is not one such exceptional case — Further, since a breach of the contract of agency can always be compensated in money, balance of convenience is also in favour of the respondent and it cannot be said that irreparable loss or injury will be caused to the petitioner — Therefore, no reason to reverse the impugned order of the lower appellate court — Civil Procedure Code, 1908 — Or. 39 Rr. 1 and 2 — Contract — Agency