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  • 39, rule 2 c. P. C. Is not maintainable. Or. 39 rule 2
  • 39, rule 2
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  • 39, rule 2 c. P. C. Is not maintainable. Or. 39 rule 2
  • 39, rule 2
Smart Summary

Factual and Procedural Background

The appellant-plaintiff filed a suit for specific performance of an agreement dated 28-3-1983, under which the plaintiff was to be the sole distributor of 'Telugu Prince Beer' manufactured by the defendant. The plaintiff agreed to purchase the beer at Rs. 260 per case, but the defendant increased the price to Rs. 272 and withheld supply, causing the plaintiff a loss of one lakh rupees. The plaintiff sought specific performance directing the defendant to supply the beer at the agreed price and quality, along with damages and costs. Pending the suit, the plaintiff applied for a temporary injunction under Order 39, Rule 2 of the Code of Civil Procedure (CPC) to restrain the defendant from breaching the agreement by supplying beer at the increased price. The trial court refused this injunction, holding that the agreement allowed price increases and damages could be assessed, so no irreparable loss was shown. The plaintiff appealed this refusal. During the appeal, a compromise was attempted but set aside by a division bench due to disputes over its correctness, leading to the matter being heard on merits before the current bench.

Legal Issues Presented

  1. Whether an application for temporary injunction under Order 39, Rule 2 CPC is maintainable when the alleged breach of contract has already occurred.
  2. Whether a temporary mandatory injunction can be granted under Order 39, Rule 2 CPC to compel specific performance or prevent breach after the breach has taken place.
  3. The applicability and scope of inherent powers under Section 151 CPC in granting injunctions not covered by Order 39 CPC.
  4. Whether the plaintiff has demonstrated irreparable loss and lack of adequate remedy to justify a temporary injunction in this commercial contract dispute.

Arguments of the Parties

Appellant's Arguments

  • The plaintiff sought to restrain the defendant from breaching the agreement by supplying beer at a higher price than agreed.
  • The plaintiff contended that the defendant’s price increase and withholding of supply caused loss and sought specific performance and injunction to enforce the agreed terms.

Defendant's Arguments

  • The defendant argued that the plaintiff breached the contract by refusing to pay the increased price, causing a loss of nearly two lakhs to the defendant.
  • It was contended that the injunction sought was a mandatory injunction, which cannot be granted under Order 39, Rule 2 CPC.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Rasul Karim vs. Pirubhai Amirbhai Beaman (1915) Mandatory injunctions are not contemplated under Order 39, Rule 2 CPC. Supported the principle that injunctions under Order 39, Rule 2 are to prevent threatened breaches, not to mandate performance after breach.
Kandaswamy vs. Subramania (Madras High Court) Temporary mandatory injunctions can be granted in cases of imminent injury not compensable by money. Distinguished as applicable only where threatened injury is imminent and irreparable.
Gopayya vs. Ankayya Order 39, Rule 2 CPC empowers injunctions restraining injury; mandatory injunctions fall outside its scope but courts have inherent power. Clarified the limits of Order 39, Rule 2 and recognized inherent powers under Section 151 CPC.
Manohar Lal vs. Seth Hira Lal (Supreme Court) Court’s inherent power to grant injunctions beyond Order 39 CPC in appropriate circumstances. Confirmed that inherent powers exist but are not applicable in the present case.
Mohd. Ibrahim Khan vs. Pateshwari Prasad; Durga Das vs. Nulin Chandra; Fckira Mahadaji vs. Rumsukhi Bai Injunctions are generally not granted in suits for declaration without consequential relief. Supported the principle that injunctions are not granted where damages suffice and no permanent injunction is claimed.

Court's Reasoning and Analysis

The court analyzed the applicability of Order 39, Rule 2 CPC, which allows temporary injunctions to restrain threatened breaches or injuries that have not yet occurred. Since the plaintiff’s suit was for specific performance and alleged breach had already occurred, the court held that the application for temporary injunction was not maintainable under this provision. The court explained that Order 39, Rule 2 is akin to the English "quia timet" action, designed to prevent anticipated harm, not to mandate performance after breach. Although courts have inherent powers under Section 151 CPC to grant injunctions beyond the scope of Order 39, Rule 2, such powers require a clear right, necessity, and extreme hardship, which were not demonstrated here. The court further noted that the dispute involved a commercial contract where damages are an adequate remedy, and the plaintiff failed to show irreparable loss or that the injunction was necessary. Additionally, there was a dispute regarding the quality of goods, which could not be the subject of an injunction. Therefore, the court concluded that a temporary mandatory injunction compelling the defendant to supply beer at the agreed rate was not justified.

Holding and Implications

The appeal is dismissed.

The court refused to grant a temporary injunction under Order 39, Rule 2 CPC as the breach was already committed, and the plaintiff failed to demonstrate irreparable loss or the necessity of such an injunction. The decision affirms that temporary injunctions under this provision are intended to prevent threatened breaches, not to enforce specific performance after breach. The ruling underscores the adequacy of damages as a remedy in commercial contract disputes and cautions against granting mandatory injunctions without clear necessity. No new precedent was set; the ruling applies existing principles to dismiss the injunction application, leaving the parties to seek relief through the main suit and damages.

    Golden Wine Agencies, Hyderabad v. Venedela Distilleries (P.) Ltd., Hyderabad

    P.Kodandaramayya, J.:-

    (1) This appeal is filed against an order refusing to grant a temporary injunction under or. 39; rule 2 c. P. C restraining the defendant from committing breach of an agreement dated 28 - 3 - 1983.

    (2) The appellant - plaintiff filed a suit for specific performance of an agreement to sell what is called 'telugu prince beer' to be manufactured by the defendant. The plaintiff agreed to be the sole distributor of this product of the defendant and agreed to purchase the same at rs. 260/ - per case of four dozens ex - factory. The defendant contrary to the said agreement increased the price at rs. 272/ - and withheld supplying the goods and thus the plaintiff suffered a loss of one lakh for the relevant period and hence the suit was filed for specific performance of the agreement directing the defendant to supply the telugu prince beer to the plaintiff at the rate and quality agreed to according to the requisition of the plaintiff and also for damages and costs. Pending the suit the plaintiff sought temporary injunction under or. 39, rule 2 c. P. C. Restraining the defendant from committing the breach of the agreement dated 28 - 3 - 83 by directing the defendant to supply to the plaintiff the standard quality of telugu prince beer at the agreed price of rs. 260/ - per case pending the disposal of the suit.

    (3) The defendant resisted this application on the ground that the plaintiff himself committed the breach in not paying the increased price for beer in terms of the contract resulting in huge loss of nearly two lakhs rupees to the defendant. It is further contended that the direction sought is in the nature of an interim mandatory injunction and the same cannot be granted. The trial court dismissed the said application holding that the agreement itself provides the increase of price of beer and therefore it is possible to assess the damage in case of breach of contract by either party and it cannot be said that irreparable loss would be caused if no temporary injunction is granted against the defendant. The said order is now impugned in this appeal.

    (4) It appears at one stage the parties have compromised the matter and actually filed a compromise memo into this court agreeing for an interim arrangement pending the suit. But a division bench of this court was constrained to set aside the compromise as the counsel appearing for the parties had disputed the correctness of the original filed into court and they directed the appeal to be posted before another division bench and that was how the appeal has come up before us.

    (5) Before us also some discussion took place regarding the possibility of interim arrangement but the parties did not agree and hence we have to proceed with the judgment on merits.

    (6) The facts disclose that the suit is filed for specific performance and the plaintiff alleged that the breach was already committed and it is clear to our mind that the present application under or. 39, rule 2 c. P. C. Is not maintainable. Or. 39 rule 2 is in the following terms :

    "or. 39, r. 2 (1) in any suit for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit. And either before or after judgment, apply to the court for a temporary injunction to restrain the defendant from committing the breach of contract or injury complained of, or any breach of contract or injury of a like kind arising out of the same contract or relating to the same property or right. (2) the court may by order grant such injunction, on such terms as to the duration of the injunction, keeping an account, giving security, or otherwise, as the court thinks fit."

    The said provision can broadly be compared with what is known as quia timet action in england. The phrase means 'because he fears'. Osborn defines this action as "a quia timet action is one by which a person may obtain an injunction to prevent or restrain some threatened act being done which, if done, would cause him substantial damage, and for which money would be no adequate or sufficient remedy, eg. , obstruction of ancient lights (ord. 50, r. 6) ". A persual of the provision clearly disclose 1hat the suit itself must be a suit for restraining the defendant from committing the breach and the apprehended injury has not yet taken place. Hence it is clear that if the breach is already committed, strictly the provision has no application, as it amounts to granting a mandatory injunction in an interlocutory application. In fact as early as in 1915 in rasul karim vs. Pirubhai amirbhai beaman held that issuing such a mandatory injunction is not in the contemplation of or. 39, rule 2 c. P. C. Though a division bench of the madras high court in kandaswamy vs. Subramania 208, declined to adopt the said opinion of beanam, j. And found that the temporary injunction in a mandatory form can be granted. But those cases must be confined where the threatened injury is imminent and it cannot be compensated in money. As observed in gopayya vs. Ankayya "therefore it is plain from the statue itself that a court acting under or. 39, r. 2 can only grunt an injunction restraining the defendant from committing injury. It is no answer to such injunction that in effect the defendant is compelled to perform certain acts which ordinarily would be subject of a mandatory injunction. And if for some reason the court finds it necessary to issue a temporary injunction it cannot be said that such an injunction is beyond its inherent power, but it should not act under or. 39, r. 2. "

    (7) We can visualise cases, when a court granted a temporary injunction restraining the defendant not to close a channel or not to pull down a stair case but non - the - less the defendant violated the said order, the court can grant a temporary mandatory injunction to restore the previous position and in that case if cannot be said that this injunction is beyond the terms of or. 39, rule 2 c. P. C. Even if it falls strictly outside the language of the said provision, the court has got inherent powers under sec. 151 c. P. C. To give the redress. Apart from it now the supreme court ruled that the court has got inherent power so grant injunction in circumstances not covered by or. 39 vide manohar lal vs. Seth hira lal but the present application filed under or. 39, rule 2 c. P. C. Is clearly not sustainable as the requirements of the said provision are not satisfied. Under the said rule in addition to the general requirement of prema facie case and balanced of convenience the plaintiff must show that the courts interference is necessary to protect him from irreparable loss or the threatened injury and secondly there is no sufficient remedy to him to protect himself. We have already held that the main suit itself must be rne for restraining the defendant from committing the breach. Even under or. 39, rule 1 c. P. C. There are clear authorities to the effect that an injunction shall not be granted in a suit for declaration where there was no claim for consequential relief of permanent injunction. Vide mohd. Ibrahim khan vs. Pateshwari prasad and durga das vs nulin chandra and fckira mahadaji vs. Rumsukhi bai.

    (8) Thus it is clear that the plaintiff failed to prove the requirement of or. 39, r. 2 c. P. C. This is not a case where inherent powers under sec. 151 c. P. C. Can be invoiced. The relief in the form of temporary mandatory injunction cannot be granted unless the plaintiff shows a clear right and a case of necessity and of extreme hardship. The court should exercise its jurisdiction of granting temporary mandatory injunction with greatest possible care and in cases where the remedy of damages is inadequate in the interests of justice.

    (9) The plaintiff is not entitled to the temporary injunction which is in the nature of a mandatory injunction as the court should compel the defendant to supply at the agreed rate when the breach was already committed. Further there is dispute about the quality of the goods also and this cannot be the subject matter of an injunction. The court should not grant an injunction which cannot specifically be enforced. In the present case the agreement entered into between the parties a commercial contract and any breach of such contract can always be compensated in money and we see no justification in granting the injunction as prayed for. Hence this appeal is dismissed and we make no order as to costs. A. A. O. Dismissed.

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    Golden Wine Agencies, Hyderabad v. Venedela Distilleries (P.) Ltd., Hyderabad
    (Mar 22, 1984)