M/S Best Sellers Retail(I)P.Ltdvs M/S Aditya Birla Nuvo Ltd.

&Ors

(2012) 6 SCC 792

HEAD NOTE:

Temporary injunction - Factors to be considered while passing order - Irreparable loss Prima
facie case in favour of party seeking relief (plaintiff) not enough - It must be shown prima
facie that injury suffered by plaintiff on refusal of temporary injunction would be irreparable
- Franchise/Agency agreement for exclusive sale of goods of respondent-plaintiff Company
through premises leased to appellant-defendant franchisee/agent partnership firm by one of
its partners and retention of possession of said premises for duration of agreement by said
agent partnership firm - Suit for specific performance of said agency agreement filed by
respondent Company, also claiming alternative relief of damages in case of non-grant of
relief of specific performance - Along with said suit, application under Or. 39 Rr. 1 & 2 filed
seeking temporary injunction restraining defendants (said partnership firm and partner
concerned) from leasing, sub-leasing, alienating or encumbering said leased premises -
Though plaintiff would suffer financial losses on refusal of temporary injunction but it would
be entitled to damages if alternative relief claimed in suit was ultimately granted by court -
Hence, held, injury that would be suffered by plaintiff on refusal of temporary injunction
cannot be said to be irreparable - Courts below furthermore not justified in granting
temporary injunction on ground that refusal would entail hardship and mental agony to
plaintiff-respondent Company - Plaintiff-respondent Company is a limited company carrying
on the business of readymade garments and it is not possible to appreciate what mental agony
and hardship it will suffer except financial losses.

FACTS:

The relevant facts briefly are that Aditya Birla Nuvo Ltd., respondent no.1 in both the
appeals, filed a suit O.S. No.1533 of 2010 against Liberty Agencies, a partnership firm and its
partners, in the Court of the City Civil Judge at Bangalore. The case of the respondent no.1 in
the plaint was as follows: The respondent no.1 was engaged in the business of readymade
garments and accessories under various reputed brand names and in the year 1995 had
appointed Liberty Agencies as an agent to conduct its business of readymade garments and
accessories with the reputed brand name Louis Philippe. Thereafter, on 02.03.2005
respondent no.1 entered into a fresh agreement with The relevant facts briefly are that Aditya
Birla Nuvo Ltd., respondent no.1 in both the appeals, filed a suit O.S. No.1533 of 2010
against Liberty Agencies, a partnership firm and its partners, in the Court of the City Civil
Judge at Bangalore. The case of the respondent no.1 in the plaint was as follows: The
respondent no.1 was engaged in the business of readymade garments and accessories under
various reputed brand names and in the year 1995 had appointed Liberty Agencies as an
agent to conduct its business of readymade garments and accessories with the reputed brand
name Louis Philippe.

ISSUES:

1. Whether the plaintiff has a prima facie case;

2. Whether balance of convenience is in favour of the plaintiff; and
3. Whether the plaintiff will suffer irreparable loss and injury if an order of injunction
was not passed.

APPELLANT’S CONTENTIONS:

1. Learned counsel for the appellants further submitted that Section 14(1) of the Specific
Relief Act, 1963 provides in clause (b) that a contract which runs into such minute or
numerous details or which is so dependent on the personal qualifications or volition of
the parties, or otherwise from its nature is such, that the court cannot enforce specific
performance of its material terms, such a contract cannot be specifically enforced.
They submitted that similarly Section 14(1) in clause (d) provides that a contract, the
performance which involves the performance of a continuous duty which the court
cannot supervise, is a contract which cannot be specifically enforced. They submitted
that the agreement between Liberty Agencies and respondent no.1 is a contract of
agency and is covered under clauses (b) and (d) of Section 14(1) of the Specific Relief
Act, 1963 and is one which cannot be specifically enforced. They submitted that
Section 14(1) of the Specific Relief Act, 1963 in clause (c) further provides that a
contract which is in its nature determinable cannot be specifically enforced. They
argued that on completion of six years from the date of the agreement, Liberty
Agencies could terminate the agreement and the six years period had expired in the
 year 2011 and hence the Court cannot specifically enforce the contract. They
submitted that Section 41(e) of the Specific Relief Act, 1963 clearly provides that an
injunction cannot be granted to prevent breach of a contract, the performance of
which would not be enforced.
2. Learned counsel for the appellants cited the decision in Indian Oil Corporation Ltd. v.
Amritsar Gas Service &Ors. [(1991) 1 SCC 533] in which this Court has held that a
contract which is in its nature determinable cannot be enforced by the Court. They
also cited the decision in Percept DMark (India) (P) Ltd. v. Zaheer Khan &Anr.
[(2006) 4 SCC 227] in which this Court has held relying on the judgment of the
Chancery Division in Page One Records Ltd. v. Britton [(1968) 1 WLR 157: (1967) 3
All ER 822], that where the totality of the obligations between the parties give rise to
a fiduciary relationship injunction would not be granted because the performance of
the duties imposed on the party in the fiduciary relationship could not be enforced at
the instance of the other party.
3. Learned counsel for the appellants further submitted that the agreement between
Liberty Agencies and the respondent no.1 was an agency agreement and it did not
create any interest whatsoever in the suit schedule property and, therefore, the
respondent no.1 was not entitled to any injunction restraining the owner of the suit
schedule property from dealing with the property in any manner with a third party.
They submitted that in any case since the defendants had clearly stated in their
objections to the application for temporary injunction that possession of the suit
schedule property had already been delivered to a third party, Best Sellers Retail (I)
Pvt. Ltd., the trial court should not have granted any injunction without the third party
being impleaded as a defendant. Learned counsel for the appellants submitted that the
interest of the third party has been totally ignored by the trial court and the High Court
and this is a fit case in which the order of temporary injunction should be set aside.

RESPONDENT’S CONTENTIONS:

1. He submitted that under clause B-2 of the agreement, Liberty Agencies had given a
warranty that the suit schedule property is owned by it and that it will retain
possession of the suit schedule property until the expiry of the agreement. He
submitted that under clause D of the agreement the duration of the agreement was for
 a period of twelve years from the date of the agreement and this period was to expire
in 2017 and, therefore, it is not correct, as has been contended by the learned counsel
for the appellants, that the period of the agreement has expired. He argued that under
clause E-2 of the agreement only the respondent no.1 company had the right to
terminate the agreement by giving a written notice of not less than three months after
the end of six years from the date of the agreement and hence Liberty Agencies had
no right to terminate the agreement. He submitted that no contention can, therefore, be
raised on behalf of Liberty Agencies that the contract was determinable in nature or
that the contract had expired.
2. He cited Bowstead and Reynolds on Agency for the proposition that in exceptional
cases specific performance of a contract of agency can also be decreed by the Court.
He argued that Section 42 of the Specific Relief Act, 1963 makes it abundantly clear
that where a contract comprises an affirmative agreement to do a certain act, coupled
with a negative agreement, express or implead, 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. He also cited the decision of the Chancery Division in Donnell v.
Bennett reported in 22 Ch.D. 835 where it has been held that where there is a negative
clause in the agreement, the Court has to enforce it without regard to the question of
whether specific performance could be granted of the entire contract. He referred to
clause B-5 of the agreement which provides that Liberty Agencies shall only sell the
products supplied by the respondent no.1 company and shall not sell any other
articles/products manufactured by any other person/Company/Firm in the premises
during the period of the agreement unless approved by the respondent no.1 company.
He submitted that this is not a case where the appellants are entitled to any relief from
this Court under Article 136 of the Constitution of India.
3. He submitted that future profits and loss of goodwill of the respondent no.1 cannot be
calculated in terms of the money, but the aforesaid statement of damages claimed by
the respondent no.1 in the plaint would show that the respondent no.1 has itself
calculated a projected loss of profit for the balance seven year term of the agreement
as Rs.10,31,00,000/- and has also assessed loss of goodwill at Rs.2,00,00,000/besides
the loss of Rs.6,00,00,000/- in relocating the store to another place in Brigade Road,
Bangalore.
JUDGMENT OF THE CPURT:

Despite this claim towards damages made by the respondent no.1 in the plaint, the trial court
has held that if the temporary injunction as sought for is not granted, Liberty Agencies may
lease or sub-lease the suit schedule property or create third party interest over the same and in
such an event, there will be multiplicity of proceedings and thereby the respondent no.1 will
be put to hardship and mental agony, which cannot be compensated in terms of money.
Respondent no.1 is a limited company carrying on the business of readymade garments and
we fail to appreciate what mental agony and hardship it will suffer except financial losses.
The High Court has similarly held in the impugned judgment that if the premises is let out,
the respondent no.1 will be put to hardship and the relief claimed would be frustrated and,
therefore, it is proper to grant injunction and the trial court has rightly granted injunction
restraining the partners of Liberty Agencies from alienating, leasing, sub-leasing or
encumbering the property till the disposal of the suit. The High Court lost sight of the fact
that if the temporary injunction restraining Liberty Agencies and its partners from allowing,
leasing, sub-leasing or encumbering the suit schedule property was not granted, and the
respondent no.1 ultimately succeeded in the suit, it would be entitled to damages claimed and
proved before the court. In other words, the respondent no.1 will not suffer irreparable injury.
To quote the words of Alderson, B. in The Attorney-General vs. Hallett [153 ER 1316:
(1857) 16 M. & W.569]: I take the meaning of irreparable injury to be that which, if not
prevented by injunction, cannot be afterwards compensated by any decree which the Court
can pronounce in the result of the cause. For the aforesaid reasons, the court set aside the
order of temporary injunction passed by the trial court as well as the impugned judgment and
the order dated 16.07.2010 of the High Court. The appeals are allowed with no order as to
costs.

M/S Best Sellers Retail(I)P.Ltdvs M/S Aditya Birla Nuvo Ltd.&Ors

(2012) 6 SCC 792

HEAD NOTE:
Temporary injunction - Factors to be considered while passing order - Irreparable loss Prima
facie case in favour of party seeking relief (plaintiff) not enough - It must be shown prima
facie that injury suffered by plaintiff on refusal of temporary injunction would be irreparable
- Franchise/Agency agreement for exclusive sale of goods of respondent-plaintiff Company
through premises leased to appellant-defendant franchisee/agent partnership firm by one of
its partners and retention of possession of said premises for duration of agreement by said
agent partnership firm - Suit for specific performance of said agency agreement filed by
respondent Company, also claiming alternative relief of damages in case of non-grant of
relief of specific performance - Along with said suit, application under Or. 39 Rr. 1 & 2 filed
seeking temporary injunction restraining defendants (said partnership firm and partner
concerned) from leasing, sub-leasing, alienating or encumbering said leased premises -
Though plaintiff would suffer financial losses on refusal of temporary injunction but it would
be entitled to damages if alternative relief claimed in suit was ultimately granted by court -
Hence, held, injury that would be suffered by plaintiff on refusal of temporary injunction
cannot be said to be irreparable - Courts below furthermore not justified in granting
temporary injunction on ground that refusal would entail hardship and mental agony to
plaintiff-respondent Company - Plaintiff-respondent Company is a limited company carrying
on the business of readymade garments and it is not possible to appreciate what mental agony
and hardship it will suffer except financial losses.

FACTS:

The relevant facts briefly are that Aditya Birla Nuvo Ltd., respondent no.1 in both the
appeals, filed a suit O.S. No.1533 of 2010 against Liberty Agencies, a partnership firm and its
partners, in the Court of the City Civil Judge at Bangalore. The case of the respondent no.1 in
the plaint was as follows: The respondent no.1 was engaged in the business of readymade
garments and accessories under various reputed brand names and in the year 1995 had
appointed Liberty Agencies as an agent to conduct its business of readymade garments and
accessories with the reputed brand name Louis Philippe. Thereafter, on 02.03.2005
respondent no.1 entered into a fresh agreement with The relevant facts briefly are that Aditya
Birla Nuvo Ltd., respondent no.1 in both the appeals, filed a suit O.S. No.1533 of 2010
against Liberty Agencies, a partnership firm and its partners, in the Court of the City Civil
Judge at Bangalore. The case of the respondent no.1 in the plaint was as follows: The
respondent no.1 was engaged in the business of readymade garments and accessories under
various reputed brand names and in the year 1995 had appointed Liberty Agencies as an
agent to conduct its business of readymade garments and accessories with the reputed brand
name Louis Philippe.

ISSUES:

4. Whether the plaintiff has a prima facie case;

5. Whether balance of convenience is in favour of the plaintiff; and
6. Whether the plaintiff will suffer irreparable loss and injury if an order of injunction
was not passed.

APPELLANT’S CONTENTIONS:

4. Learned counsel for the appellants further submitted that Section 14(1) of the Specific
Relief Act, 1963 provides in clause (b) that a contract which runs into such minute or
numerous details or which is so dependent on the personal qualifications or volition of
the parties, or otherwise from its nature is such, that the court cannot enforce specific
performance of its material terms, such a contract cannot be specifically enforced.
They submitted that similarly Section 14(1) in clause (d) provides that a contract, the
performance which involves the performance of a continuous duty which the court
cannot supervise, is a contract which cannot be specifically enforced. They submitted
that the agreement between Liberty Agencies and respondent no.1 is a contract of
agency and is covered under clauses (b) and (d) of Section 14(1) of the Specific Relief
Act, 1963 and is one which cannot be specifically enforced. They submitted that
Section 14(1) of the Specific Relief Act, 1963 in clause (c) further provides that a
contract which is in its nature determinable cannot be specifically enforced. They
argued that on completion of six years from the date of the agreement, Liberty
Agencies could terminate the agreement and the six years period had expired in the
year 2011 and hence the Court cannot specifically enforce the contract. They
submitted that Section 41(e) of the Specific Relief Act, 1963 clearly provides that an
injunction cannot be granted to prevent breach of a contract, the performance of
which would not be enforced.
 5. Learned counsel for the appellants cited the decision in Indian Oil Corporation Ltd. v.
Amritsar Gas Service &Ors. [(1991) 1 SCC 533] in which this Court has held that a
contract which is in its nature determinable cannot be enforced by the Court. They
also cited the decision in Percept DMark (India) (P) Ltd. v. Zaheer Khan &Anr.
[(2006) 4 SCC 227] in which this Court has held relying on the judgment of the
Chancery Division in Page One Records Ltd. v. Britton [(1968) 1 WLR 157: (1967) 3
All ER 822], that where the totality of the obligations between the parties give rise to
a fiduciary relationship injunction would not be granted because the performance of
the duties imposed on the party in the fiduciary relationship could not be enforced at
the instance of the other party.
6. Learned counsel for the appellants further submitted that the agreement between
Liberty Agencies and the respondent no.1 was an agency agreement and it did not
create any interest whatsoever in the suit schedule property and, therefore, the
respondent no.1 was not entitled to any injunction restraining the owner of the suit
schedule property from dealing with the property in any manner with a third party.
They submitted that in any case since the defendants had clearly stated in their
objections to the application for temporary injunction that possession of the suit
schedule property had already been delivered to a third party, Best Sellers Retail (I)
Pvt. Ltd., the trial court should not have granted any injunction without the third party
being impleaded as a defendant. Learned counsel for the appellants submitted that the
interest of the third party has been totally ignored by the trial court and the High Court
and this is a fit case in which the order of temporary injunction should be set aside.

RESPONDENT’S CONTENTIONS:

4. He submitted that under clause B-2 of the agreement, Liberty Agencies had given a
warranty that the suit schedule property is owned by it and that it will retain
possession of the suit schedule property until the expiry of the agreement. He
submitted that under clause D of the agreement the duration of the agreement was for
a period of twelve years from the date of the agreement and this period was to expire
in 2017 and, therefore, it is not correct, as has been contended by the learned counsel
for the appellants, that the period of the agreement has expired. He argued that under
clause E-2 of the agreement only the respondent no.1 company had the right to
 terminate the agreement by giving a written notice of not less than three months after
the end of six years from the date of the agreement and hence Liberty Agencies had
no right to terminate the agreement. He submitted that no contention can, therefore, be
raised on behalf of Liberty Agencies that the contract was determinable in nature or
that the contract had expired.
5. He cited Bowstead and Reynolds on Agency for the proposition that in exceptional
cases specific performance of a contract of agency can also be decreed by the Court.
He argued that Section 42 of the Specific Relief Act, 1963 makes it abundantly clear
that where a contract comprises an affirmative agreement to do a certain act, coupled
with a negative agreement, express or implead, 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. He also cited the decision of the Chancery Division in Donnell v.
Bennett reported in 22 Ch.D. 835 where it has been held that where there is a negative
clause in the agreement, the Court has to enforce it without regard to the question of
whether specific performance could be granted of the entire contract. He referred to
clause B-5 of the agreement which provides that Liberty Agencies shall only sell the
products supplied by the respondent no.1 company and shall not sell any other
articles/products manufactured by any other person/Company/Firm in the premises
during the period of the agreement unless approved by the respondent no.1 company.
He submitted that this is not a case where the appellants are entitled to any relief from
this Court under Article 136 of the Constitution of India.
6. He submitted that future profits and loss of goodwill of the respondent no.1 cannot be
calculated in terms of the money, but the aforesaid statement of damages claimed by
the respondent no.1 in the plaint would show that the respondent no.1 has itself
calculated a projected loss of profit for the balance seven year term of the agreement
as Rs.10,31,00,000/- and has also assessed loss of goodwill at Rs.2,00,00,000/besides
the loss of Rs.6,00,00,000/- in relocating the store to another place in Brigade Road,
Bangalore.

JUDGMENT OF THE CPURT:

Despite this claim towards damages made by the respondent no.1 in the plaint, the trial court
has held that if the temporary injunction as sought for is not granted, Liberty Agencies may
lease or sub-lease the suit schedule property or create third party interest over the same and in
such an event, there will be multiplicity of proceedings and thereby the respondent no.1 will
be put to hardship and mental agony, which cannot be compensated in terms of money.
Respondent no.1 is a limited company carrying on the business of readymade garments and
we fail to appreciate what mental agony and hardship it will suffer except financial losses.
The High Court has similarly held in the impugned judgment that if the premises is let out,
the respondent no.1 will be put to hardship and the relief claimed would be frustrated and,
therefore, it is proper to grant injunction and the trial court has rightly granted injunction
restraining the partners of Liberty Agencies from alienating, leasing, sub-leasing or
encumbering the property till the disposal of the suit. The High Court lost sight of the fact
that if the temporary injunction restraining Liberty Agencies and its partners from allowing,
leasing, sub-leasing or encumbering the suit schedule property was not granted, and the
respondent no.1 ultimately succeeded in the suit, it would be entitled to damages claimed and
proved before the court. In other words, the respondent no.1 will not suffer irreparable injury.
To quote the words of Alderson, B. in The Attorney-General vs. Hallett [153 ER 1316:
(1857) 16 M. & W.569]: I take the meaning of irreparable injury to be that which, if not
prevented by injunction, cannot be afterwards compensated by any decree which the Court
can pronounce in the result of the cause. For the aforesaid reasons, the court set aside the
order of temporary injunction passed by the trial court as well as the impugned judgment and
the order dated 16.07.2010 of the High Court. The appeals are allowed with no order as to
costs.

M/S Best Sellers Retail(I)P.Ltdvs M/S Aditya Birla Nuvo Ltd.&Ors

(2012) 6 SCC 792

HEAD NOTE:

Temporary injunction - Factors to be considered while passing order - Irreparable loss Prima
facie case in favour of party seeking relief (plaintiff) not enough - It must be shown prima
facie that injury suffered by plaintiff on refusal of temporary injunction would be irreparable
- Franchise/Agency agreement for exclusive sale of goods of respondent-plaintiff Company
through premises leased to appellant-defendant franchisee/agent partnership firm by one of
its partners and retention of possession of said premises for duration of agreement by said
agent partnership firm - Suit for specific performance of said agency agreement filed by
respondent Company, also claiming alternative relief of damages in case of non-grant of
relief of specific performance - Along with said suit, application under Or. 39 Rr. 1 & 2 filed
seeking temporary injunction restraining defendants (said partnership firm and partner
concerned) from leasing, sub-leasing, alienating or encumbering said leased premises -
Though plaintiff would suffer financial losses on refusal of temporary injunction but it would
be entitled to damages if alternative relief claimed in suit was ultimately granted by court -
Hence, held, injury that would be suffered by plaintiff on refusal of temporary injunction
cannot be said to be irreparable - Courts below furthermore not justified in granting
temporary injunction on ground that refusal would entail hardship and mental agony to
plaintiff-respondent Company - Plaintiff-respondent Company is a limited company carrying
on the business of readymade garments and it is not possible to appreciate what mental agony
and hardship it will suffer except financial losses.

FACTS:

The relevant facts briefly are that Aditya Birla Nuvo Ltd., respondent no.1 in both the
appeals, filed a suit O.S. No.1533 of 2010 against Liberty Agencies, a partnership firm and its
partners, in the Court of the City Civil Judge at Bangalore. The case of the respondent no.1 in
the plaint was as follows: The respondent no.1 was engaged in the business of readymade
garments and accessories under various reputed brand names and in the year 1995 had
appointed Liberty Agencies as an agent to conduct its business of readymade garments and
accessories with the reputed brand name Louis Philippe. Thereafter, on 02.03.2005
respondent no.1 entered into a fresh agreement with The relevant facts briefly are that Aditya
Birla Nuvo Ltd., respondent no.1 in both the appeals, filed a suit O.S. No.1533 of 2010
against Liberty Agencies, a partnership firm and its partners, in the Court of the City Civil
Judge at Bangalore. The case of the respondent no.1 in the plaint was as follows: The
respondent no.1 was engaged in the business of readymade garments and accessories under
various reputed brand names and in the year 1995 had appointed Liberty Agencies as an
agent to conduct its business of readymade garments and accessories with the reputed brand
name Louis Philippe.

ISSUES:

7. Whether the plaintiff has a prima facie case;

8. Whether balance of convenience is in favour of the plaintiff; and
9. Whether the plaintiff will suffer irreparable loss and injury if an order of injunction
was not passed.

APPELLANT’S CONTENTIONS:

7. Learned counsel for the appellants further submitted that Section 14(1) of the Specific
Relief Act, 1963 provides in clause (b) that a contract which runs into such minute or
numerous details or which is so dependent on the personal qualifications or volition of
the parties, or otherwise from its nature is such, that the court cannot enforce specific
performance of its material terms, such a contract cannot be specifically enforced.
They submitted that similarly Section 14(1) in clause (d) provides that a contract, the
performance which involves the performance of a continuous duty which the court
cannot supervise, is a contract which cannot be specifically enforced. They submitted
that the agreement between Liberty Agencies and respondent no.1 is a contract of
agency and is covered under clauses (b) and (d) of Section 14(1) of the Specific Relief
Act, 1963 and is one which cannot be specifically enforced. They submitted that
Section 14(1) of the Specific Relief Act, 1963 in clause (c) further provides that a
contract which is in its nature determinable cannot be specifically enforced. They
argued that on completion of six years from the date of the agreement, Liberty
Agencies could terminate the agreement and the six years period had expired in the
year 2011 and hence the Court cannot specifically enforce the contract. They
submitted that Section 41(e) of the Specific Relief Act, 1963 clearly provides that an
injunction cannot be granted to prevent breach of a contract, the performance of
which would not be enforced.
8. Learned counsel for the appellants cited the decision in Indian Oil Corporation Ltd. v.
Amritsar Gas Service &Ors. [(1991) 1 SCC 533] in which this Court has held that a
contract which is in its nature determinable cannot be enforced by the Court. They
also cited the decision in Percept DMark (India) (P) Ltd. v. Zaheer Khan &Anr.
[(2006) 4 SCC 227] in which this Court has held relying on the judgment of the
 Chancery Division in Page One Records Ltd. v. Britton [(1968) 1 WLR 157: (1967) 3
All ER 822], that where the totality of the obligations between the parties give rise to
a fiduciary relationship injunction would not be granted because the performance of
the duties imposed on the party in the fiduciary relationship could not be enforced at
the instance of the other party.
9. Learned counsel for the appellants further submitted that the agreement between
Liberty Agencies and the respondent no.1 was an agency agreement and it did not
create any interest whatsoever in the suit schedule property and, therefore, the
respondent no.1 was not entitled to any injunction restraining the owner of the suit
schedule property from dealing with the property in any manner with a third party.
They submitted that in any case since the defendants had clearly stated in their
objections to the application for temporary injunction that possession of the suit
schedule property had already been delivered to a third party, Best Sellers Retail (I)
Pvt. Ltd., the trial court should not have granted any injunction without the third party
being impleaded as a defendant. Learned counsel for the appellants submitted that the
interest of the third party has been totally ignored by the trial court and the High Court
and this is a fit case in which the order of temporary injunction should be set aside.

RESPONDENT’S CONTENTIONS:

7. He submitted that under clause B-2 of the agreement, Liberty Agencies had given a
warranty that the suit schedule property is owned by it and that it will retain
possession of the suit schedule property until the expiry of the agreement. He
submitted that under clause D of the agreement the duration of the agreement was for
a period of twelve years from the date of the agreement and this period was to expire
in 2017 and, therefore, it is not correct, as has been contended by the learned counsel
for the appellants, that the period of the agreement has expired. He argued that under
clause E-2 of the agreement only the respondent no.1 company had the right to
terminate the agreement by giving a written notice of not less than three months after
the end of six years from the date of the agreement and hence Liberty Agencies had
no right to terminate the agreement. He submitted that no contention can, therefore, be
raised on behalf of Liberty Agencies that the contract was determinable in nature or
that the contract had expired.
 8. He cited Bowstead and Reynolds on Agency for the proposition that in exceptional
cases specific performance of a contract of agency can also be decreed by the Court.
He argued that Section 42 of the Specific Relief Act, 1963 makes it abundantly clear
that where a contract comprises an affirmative agreement to do a certain act, coupled
with a negative agreement, express or implead, 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. He also cited the decision of the Chancery Division in Donnell v.
Bennett reported in 22 Ch.D. 835 where it has been held that where there is a negative
clause in the agreement, the Court has to enforce it without regard to the question of
whether specific performance could be granted of the entire contract. He referred to
clause B-5 of the agreement which provides that Liberty Agencies shall only sell the
products supplied by the respondent no.1 company and shall not sell any other
articles/products manufactured by any other person/Company/Firm in the premises
during the period of the agreement unless approved by the respondent no.1 company.
He submitted that this is not a case where the appellants are entitled to any relief from
this Court under Article 136 of the Constitution of India.
9. He submitted that future profits and loss of goodwill of the respondent no.1 cannot be
calculated in terms of the money, but the aforesaid statement of damages claimed by
the respondent no.1 in the plaint would show that the respondent no.1 has itself
calculated a projected loss of profit for the balance seven year term of the agreement
as Rs.10,31,00,000/- and has also assessed loss of goodwill at Rs.2,00,00,000/besides
the loss of Rs.6,00,00,000/- in relocating the store to another place in Brigade Road,
Bangalore.

JUDGMENT OF THE CPURT:

Despite this claim towards damages made by the respondent no.1 in the plaint, the trial court
has held that if the temporary injunction as sought for is not granted, Liberty Agencies may
lease or sub-lease the suit schedule property or create third party interest over the same and in
such an event, there will be multiplicity of proceedings and thereby the respondent no.1 will
be put to hardship and mental agony, which cannot be compensated in terms of money.
Respondent no.1 is a limited company carrying on the business of readymade garments and
we fail to appreciate what mental agony and hardship it will suffer except financial losses.
The High Court has similarly held in the impugned judgment that if the premises is let out,
the respondent no.1 will be put to hardship and the relief claimed would be frustrated and,
therefore, it is proper to grant injunction and the trial court has rightly granted injunction
restraining the partners of Liberty Agencies from alienating, leasing, sub-leasing or
encumbering the property till the disposal of the suit. The High Court lost sight of the fact
that if the temporary injunction restraining Liberty Agencies and its partners from allowing,
leasing, sub-leasing or encumbering the suit schedule property was not granted, and the
respondent no.1 ultimately succeeded in the suit, it would be entitled to damages claimed and
proved before the court. In other words, the respondent no.1 will not suffer irreparable injury.
To quote the words of Alderson, B. in The Attorney-General vs. Hallett [153 ER 1316:
(1857) 16 M. & W.569]: I take the meaning of irreparable injury to be that which, if not
prevented by injunction, cannot be afterwards compensated by any decree which the Court
can pronounce in the result of the cause. For the aforesaid reasons, the court set aside the
order of temporary injunction passed by the trial court as well as the impugned judgment and
the order dated 16.07.2010 of the High Court. The appeals are allowed with no order as to
costs.

M/S Best Sellers Retail(I)P.Ltdvs M/S Aditya Birla Nuvo Ltd.&Ors

(2012) 6 SCC 792

HEAD NOTE:

Temporary injunction - Factors to be considered while passing order - Irreparable loss Prima
facie case in favour of party seeking relief (plaintiff) not enough - It must be shown prima
facie that injury suffered by plaintiff on refusal of temporary injunction would be irreparable
- Franchise/Agency agreement for exclusive sale of goods of respondent-plaintiff Company
through premises leased to appellant-defendant franchisee/agent partnership firm by one of
its partners and retention of possession of said premises for duration of agreement by said
agent partnership firm - Suit for specific performance of said agency agreement filed by
respondent Company, also claiming alternative relief of damages in case of non-grant of
relief of specific performance - Along with said suit, application under Or. 39 Rr. 1 & 2 filed
seeking temporary injunction restraining defendants (said partnership firm and partner
concerned) from leasing, sub-leasing, alienating or encumbering said leased premises -
Though plaintiff would suffer financial losses on refusal of temporary injunction but it would
be entitled to damages if alternative relief claimed in suit was ultimately granted by court -
Hence, held, injury that would be suffered by plaintiff on refusal of temporary injunction
cannot be said to be irreparable - Courts below furthermore not justified in granting
temporary injunction on ground that refusal would entail hardship and mental agony to
plaintiff-respondent Company - Plaintiff-respondent Company is a limited company carrying
on the business of readymade garments and it is not possible to appreciate what mental agony
and hardship it will suffer except financial losses.

FACTS:

The relevant facts briefly are that Aditya Birla Nuvo Ltd., respondent no.1 in both the
appeals, filed a suit O.S. No.1533 of 2010 against Liberty Agencies, a partnership firm and its
partners, in the Court of the City Civil Judge at Bangalore. The case of the respondent no.1 in
the plaint was as follows: The respondent no.1 was engaged in the business of readymade
garments and accessories under various reputed brand names and in the year 1995 had
appointed Liberty Agencies as an agent to conduct its business of readymade garments and
accessories with the reputed brand name Louis Philippe. Thereafter, on 02.03.2005
respondent no.1 entered into a fresh agreement with The relevant facts briefly are that Aditya
Birla Nuvo Ltd., respondent no.1 in both the appeals, filed a suit O.S. No.1533 of 2010
against Liberty Agencies, a partnership firm and its partners, in the Court of the City Civil
Judge at Bangalore. The case of the respondent no.1 in the plaint was as follows: The
respondent no.1 was engaged in the business of readymade garments and accessories under
various reputed brand names and in the year 1995 had appointed Liberty Agencies as an
agent to conduct its business of readymade garments and accessories with the reputed brand
name Louis Philippe.

ISSUES:

10. Whether the plaintiff has a prima facie case;

11. Whether balance of convenience is in favour of the plaintiff; and
 12. Whether the plaintiff will suffer irreparable loss and injury if an order of injunction
was not passed.

APPELLANT’S CONTENTIONS:

10. Learned counsel for the appellants further submitted that Section 14(1) of the Specific
Relief Act, 1963 provides in clause (b) that a contract which runs into such minute or
numerous details or which is so dependent on the personal qualifications or volition of
the parties, or otherwise from its nature is such, that the court cannot enforce specific
performance of its material terms, such a contract cannot be specifically enforced.
They submitted that similarly Section 14(1) in clause (d) provides that a contract, the
performance which involves the performance of a continuous duty which the court
cannot supervise, is a contract which cannot be specifically enforced. They submitted
that the agreement between Liberty Agencies and respondent no.1 is a contract of
agency and is covered under clauses (b) and (d) of Section 14(1) of the Specific Relief
Act, 1963 and is one which cannot be specifically enforced. They submitted that
Section 14(1) of the Specific Relief Act, 1963 in clause (c) further provides that a
contract which is in its nature determinable cannot be specifically enforced. They
argued that on completion of six years from the date of the agreement, Liberty
Agencies could terminate the agreement and the six years period had expired in the
year 2011 and hence the Court cannot specifically enforce the contract. They
submitted that Section 41(e) of the Specific Relief Act, 1963 clearly provides that an
injunction cannot be granted to prevent breach of a contract, the performance of
which would not be enforced.
11. Learned counsel for the appellants cited the decision in Indian Oil Corporation Ltd. v.
Amritsar Gas Service &Ors. [(1991) 1 SCC 533] in which this Court has held that a
contract which is in its nature determinable cannot be enforced by the Court. They
also cited the decision in Percept DMark (India) (P) Ltd. v. Zaheer Khan &Anr.
[(2006) 4 SCC 227] in which this Court has held relying on the judgment of the
Chancery Division in Page One Records Ltd. v. Britton [(1968) 1 WLR 157: (1967) 3
All ER 822], that where the totality of the obligations between the parties give rise to
a fiduciary relationship injunction would not be granted because the performance of
the duties imposed on the party in the fiduciary relationship could not be enforced at
the instance of the other party.
 12. Learned counsel for the appellants further submitted that the agreement between
Liberty Agencies and the respondent no.1 was an agency agreement and it did not
create any interest whatsoever in the suit schedule property and, therefore, the
respondent no.1 was not entitled to any injunction restraining the owner of the suit
schedule property from dealing with the property in any manner with a third party.
They submitted that in any case since the defendants had clearly stated in their
objections to the application for temporary injunction that possession of the suit
schedule property had already been delivered to a third party, Best Sellers Retail (I)
Pvt. Ltd., the trial court should not have granted any injunction without the third party
being impleaded as a defendant. Learned counsel for the appellants submitted that the
interest of the third party has been totally ignored by the trial court and the High Court
and this is a fit case in which the order of temporary injunction should be set aside.

RESPONDENT’S CONTENTIONS:

10. He submitted that under clause B-2 of the agreement, Liberty Agencies had given a
warranty that the suit schedule property is owned by it and that it will retain
possession of the suit schedule property until the expiry of the agreement. He
submitted that under clause D of the agreement the duration of the agreement was for
a period of twelve years from the date of the agreement and this period was to expire
in 2017 and, therefore, it is not correct, as has been contended by the learned counsel
for the appellants, that the period of the agreement has expired. He argued that under
clause E-2 of the agreement only the respondent no.1 company had the right to
terminate the agreement by giving a written notice of not less than three months after
the end of six years from the date of the agreement and hence Liberty Agencies had
no right to terminate the agreement. He submitted that no contention can, therefore, be
raised on behalf of Liberty Agencies that the contract was determinable in nature or
that the contract had expired.
11. He cited Bowstead and Reynolds on Agency for the proposition that in exceptional
cases specific performance of a contract of agency can also be decreed by the Court.
He argued that Section 42 of the Specific Relief Act, 1963 makes it abundantly clear
that where a contract comprises an affirmative agreement to do a certain act, coupled
with a negative agreement, express or implead, 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. He also cited the decision of the Chancery Division in Donnell v.
Bennett reported in 22 Ch.D. 835 where it has been held that where there is a negative
clause in the agreement, the Court has to enforce it without regard to the question of
whether specific performance could be granted of the entire contract. He referred to
clause B-5 of the agreement which provides that Liberty Agencies shall only sell the
products supplied by the respondent no.1 company and shall not sell any other
articles/products manufactured by any other person/Company/Firm in the premises
during the period of the agreement unless approved by the respondent no.1 company.
He submitted that this is not a case where the appellants are entitled to any relief from
this Court under Article 136 of the Constitution of India.
12. He submitted that future profits and loss of goodwill of the respondent no.1 cannot be
calculated in terms of the money, but the aforesaid statement of damages claimed by
the respondent no.1 in the plaint would show that the respondent no.1 has itself
calculated a projected loss of profit for the balance seven year term of the agreement
as Rs.10,31,00,000/- and has also assessed loss of goodwill at Rs.2,00,00,000/besides
the loss of Rs.6,00,00,000/- in relocating the store to another place in Brigade Road,
Bangalore.

JUDGMENT OF THE CPURT:

Despite this claim towards damages made by the respondent no.1 in the plaint, the trial court
has held that if the temporary injunction as sought for is not granted, Liberty Agencies may
lease or sub-lease the suit schedule property or create third party interest over the same and in
such an event, there will be multiplicity of proceedings and thereby the respondent no.1 will
be put to hardship and mental agony, which cannot be compensated in terms of money.
Respondent no.1 is a limited company carrying on the business of readymade garments and
we fail to appreciate what mental agony and hardship it will suffer except financial losses.
The High Court has similarly held in the impugned judgment that if the premises is let out,
the respondent no.1 will be put to hardship and the relief claimed would be frustrated and,
therefore, it is proper to grant injunction and the trial court has rightly granted injunction
restraining the partners of Liberty Agencies from alienating, leasing, sub-leasing or
encumbering the property till the disposal of the suit. The High Court lost sight of the fact
that if the temporary injunction restraining Liberty Agencies and its partners from allowing,
leasing, sub-leasing or encumbering the suit schedule property was not granted, and the
respondent no.1 ultimately succeeded in the suit, it would be entitled to damages claimed and
proved before the court. In other words, the respondent no.1 will not suffer irreparable injury.
To quote the words of Alderson, B. in The Attorney-General vs. Hallett [153 ER 1316:
(1857) 16 M. & W.569]: I take the meaning of irreparable injury to be that which, if not
prevented by injunction, cannot be afterwards compensated by any decree which the Court
can pronounce in the result of the cause. For the aforesaid reasons, the court set aside the
order of temporary injunction passed by the trial court as well as the impugned judgment and
the order dated 16.07.2010 of the High Court. The appeals are allowed with no order as to
costs.