Subba Naidu And Anr. v. Badsha Sahib And Ors.

1. This is an appeal from an order of Mr. Justice Boddam by way of an interlocutory or temporary injunction. On the 9th of June 1896, the plaintiffs and the defendants entered into an agreement, of which the provisions which are material for the purposes of the question now before the Court are as follows:

Paragraph 1 says,

" For the purpose of carrying on the said mica mining work the said firm shall advance to the said Ansur Subba Naidu, Mahomed Khyruddin Sahib and Madhina Kondappa Naidu to enable them to carry on the same the sum of Rs. 10,000 only without interest,"

Paragraph 2 says,

" that for these considerations the defendants agree to deliver at the godowns of the plaintiffs at Madras all mica produced by the mines worked by them as aforesaid."

Paragraph 6 says,

" The defendants bind themselves to consign all mica produced by their mines worked by them to the plaintiffs upon the terms agreed to between the parties, and they bind themselves that they will not directly or indirectly either in their own names or in the names of their servants, relatives or others deliver for sale or dispose of otherwise or keep in stock anywhere outside the mines any mica produced from the mines worked by them or on their behalf to any one or other than the said firm for a period of nine years from the date of this agreement."

Paragraph 20 says, " On the expiry of the period of nine years , the defendants will refund the amount of Rs. 10,000 advanced to them for carrying on all their mining work." On the 7th of November 1901 a mortgage agreement was entered into between the plaintiffs and the 1st and 3rd defendants. The mortgage agreement no doubt placed matters upon a new footing, But the mortgage agreement does not relieve the defendants from their positive obligation to consign all their mica to the plaintiffs during the currency of the agreement or from their negative obligation not to consign the mica to third parties during that period. Neither of these obligations are qualified or modified by the terms of the mortgage deed of November 1901. Now the injunction which has been granted by the learned judge is in these terms;--' That the defendants, their agents and all persons claiming through or under them be restrained from moving, consigning, selling, alienating, or disposing of 231 cases of mica marked with certain letters now in the Madras Salt Cotaurs or elsewhere, and all or any such other mica as may be produced from the defendants' mines pending the further order of this Court.' Mr. Grant's first contention was this. He says that inasmuch as the positive covenant could not be enforced by a decree for specific performance, a breach of the negative covenant ought not to be restrained by an induction. Now we are relieved from considering the question as to whether the positive covenant in this case can or cannot be specially enforced, because it is conceded by the counsel on behalf of the plaintiffs that it cannot. In this state of things therefore, it has to be considered whether under the law of this country a breach of the negative convenant not to consign to third parties can be restrained by injunction, The law with regard to the granting of permanent injunctions is regulated by the pro-visions of the Specific Relief Act. Section 56 says, " An injunction cannot be granted in certain specified cases including an injunction to prevent the breach of a contract, the performance of which would not be specifically enforced," That is Clause (f) of Section 56.

2. Section 57 says,

"Notwithstanding Section 56, Clause (f) where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, expressed or implied, not to do a certain act, the circumstance 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, provided the applicant has not failed to perform the contract so far as it is binding on him."

Then, Section 54, which is the first section of Chapter X, which deals with perpetual injunctions is as follows:

Subject to the other provisions contained in or referred to by this chapter, a perpetual injunction may be granted to prevent the breach of an obligation existing in favor of the applicant whether expressly or by implication. When such obligation arises from contract, the Court shall be guided by the rules and provisions contained, in Chapter II of this Act." Now some of the rules and provisions are to be found in Section 21 which speaks of contracts which cannot be specifically enforced, and one of the contracts which under that section cannot be specifically enforced is referred to in paragraph (b), " A contract which runs into such minute or numerous details, or. which is dependant on the personal qualification or volition of the parties, or otherwise from its nature is such that the Court cannot enforce specific performance, of its material terms," and Mr. Grant's proposition of law is that Section 57 only applies to the case of contracts which are specified in Section 21, Clause (b). In other words he says that Section 57 only applies to cases which I may describe compendiously as cases like Lumley v. Wagner 1 De. G.M. and G. 604. There is certainly nothing in the words of Section 57 to suggest that so narrow a construction should be placed upon it. The section is really a proviso to Section 56 which cuts down the. operation of the preceding section. Mr. Grant has been unable to cite any decision of the Courts in this country in support of the proposition which he put forward, though no doubt there are expressions of opinion in the text-books which support his proposition. The authorities, such as there are, are against the proposition which he invites us to adopt. Although the facts in Madras Railway Company v. Rust I.L.R. 14 M. 18 are not precisely the same as those in the present case, it supports the view that Section 57 means what it says and that it is not be cut down as Mr. Grant suggests. That decision no doubt was only the decision of a single Judge. With reference to the point the learned Judge says, "It is argued that when the remedy by specific performance of a contract is expressly refused by Chapter II of the Specific Relief Act, then by virtue of Section 54, Clause (2), an injunction cannot be granted, and therefore that this contract being one extending over more than three years, and therefore not capable by Section 21, Clause (g), of specific performance cannot be the subject of an injunction. It seems to me that this argument "would make Section 57 of the Act a nullity," In that case Mr. Grant appeared as counsel and he advanced precisely the same argument which he advanced to-day. In that case the Court declined to adopt his argument and I think rightly. As regards the case of Charlesworth v. Mac Donald I.L.R. 23 B 103. I do not think it can be said to afford us any assistance because the question in that case arose in Zanzibar where the Specific Relief Act has no application. With regard to Mr. Grant's contention that Section 57 only applies to what I have described as cases like Lumley v. Wagner1. De. G.M. & G. 604, it has to be observed that one of the illustrations to Section 57, viz., illustration (c), is a re-production of the decision in Lumley v. Wagner, 3 but that it is only one of the five illustrations. The other illustrations relate to facts which are quite distinct from the facts which were in question in Lumley v. Wagner 1 De. G.M.& G. 604. That, I should have thought, was decisive as to the question whether the Legislature intended that Section 57 should only apply to cases falling under Section 21(b). If the Legislature intended that Section 21 should apply, nothing would have been easier than to have said so. It seems to me it may well be that the Legislature designedly adopted these general terms for the purpose of avoiding in this country the difficulties which have risen in the English Courts with regard to cases of this character--difficulties which resulted in the English authorities being some-what confused and not altogether reconcilable.

3. As regards Section 57, it comes to this can it be said that the applicant has failed to perform the contract as far as it is binding on him, because if he has failed to perform the contract so far as it is binding on him, then by the express words of the proviso to Section 57 he will not be entitled to any relief. Now, what is the evidence before the Judge when he made the order which is sought to be set aside. First, he had the affidavit which was filed on behalf of the plaintiffs. I need refer to only one or two paragraphs. Paragraph 2 refers to the terms of the agreement, and the third paragraph says, "That the defendants consigned mica to us at Madras only up to November 1901, but have failed to consign any further mica, although I am informed and believe they have large quantities of mica collected and stored since that date." Paragraph 5 says, "That the 1st and 3rd defendants have entered into an agreement with one Venkatasubbiah to consign through him for sale all the mica produced in the defendants' mines," Paragraph 7 says, "(n pursuance of the fraudulent agreement with the said person, the 1st and 3rd defendants have consigned for sale by him of mica which was produced by the defendants' mines since November 1901 consisting of about 231 cases or thereabouts and valued at Rs. 40,000 or thereabouts, and the said cases I am informed and believe have arrived by rail at the Salt Cotaurs, Madras, and marked (with certain letters) instead of the usual mark indicating my firm." These are the material allegations in the affidavit of the plaintiff, A very long affidavit was filed on behalf of the defendants. With regard to that affidavit I have not the least hesitation in saying that 19/20 this of it is wholly irrelevant to the question which we have to consider. 1 have given the best attention I can to this affidavit, and the conclusion I have come to is that it does not show that the plaintiffs failed to perform their contract in so far as it was binding upon them.

4. But having regard to the admissions which the defendants themselves make in the affidavit and reading the allegations in the affidavit filed on behalf of the plaintiffs by the light of these admissions, it seems to me that if the plaintiffs have failed to perform their part of the contract, their failure is the direct result of the deliberate breach of the contract by the defendants. If this is so, it does not lie in the mouths of defendants to say that plaintiffs have failed to perform the contract so far as it was binding upon them. But, as I have said, I think there is nothing on evidence to show that the plaintiffs failed to perform the contract so far as it was binding on them. Of course it has to be borne in mind that the injunction granted in the present case was not a permanent injunction, the law with regard to which is laid down in the Specific Relief Act, but a temporary injunction, the law with regard to which is regulated by the provisions of the Civil Procedure Code. Section 493, Civil Procedure Code, is quite general and says: " In any suit for restraining the defendant from the committing a breach of contract or other injury, whether compensation be 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." The granting of a temporary injunction under the powers conferred by this section is a matter of discretion. True, it is a matter of judicial discretion. But if the court which grants the injunction rightly appreciates the facts and applies to those facts the true principles, then that is a sound exercise of judicial discretion. With regard to this part of the case, Mr. Grant contended that the issue of an interlocutory or temporary injunction is governed by precisely the same principles as the granting of a permanent injunction at the trial of the case, and in support of that proposition he referred to an observation of Sir Charles Sargent in Nusserwanji Merwanji Panday v. Gordon I.L.R. 6 B. 266. The observation is at page 279 of the report, and there the learned Judge says, " It is plain, however, that, apart from the special circumstances which determine whether the court should in its discretion grant an injunction before the hearing of the suit, the same general principles must equally apply to the granting of a temporary injunction as to a perpetual injunction, and those principles must, therefore, be sought in the Specific Relief Act itself," Now, having regard to the fact that the law with regard to the granting of a perpetual injunction is to be found in the Specific Relief Act and is laid down with great precision, and that the law with regard to the granting of a temporary Injunction is to be found in the Civil Procedure Code and is declared to be a matter for discretion, if it were necessary to consider the point, I am not sure I should be prepared to go quite so far as Sir Charles Sargent. However, it is not necessary to consider that point now, because so far as this case is concerned I am prepared to go so far, and 1 say that the conduct of the plaintiffs has not been such that the court will decline to give them any relief by way of a permanent or temporary injunction. Here, can it be said that the conduct of the plaintiffs has been such as to disentitle them to an injunction. That has to be considered with reference to the allegations made in the affidavit filed on behalf of the defendants. With regard to that I do not desire to repeat the observation which I have made.

5. Various other grounds were urged by Mr. Grant as reasons why this injunction ought not to be allowed to go, and he referred to the offer which was made by the defendants at the bar. It has been decided at any rate in England that an injunction was rightly refused on account of the conduct of the plaintiffs in refusing an offer made by the defendants, there being no suggestion that the offer would not be carried out. The facts in that case are widely different from the facts in the present case. In the present case even if the offer is accepted, there is considerable doubt whether, having regard to the financial position of the defendants, the offer would in fact be carried out. Then Mr. Grant referred to the balance of convenience and he cited numerous English authorities in which it was held on the facts of those particular cases that the balance of convenience was not in favor of the injunction going. All I say with regard to this case is that on the evidence as it now stands I am not satisfied that the balance of" convenience is not in favor of the injunction in the form in which it was issued. The matter is one of judicial discretion, and it seems to me the learned Judge in making the order did exercise a sound judicial discretion and his order was right. I think this appeal must be dismissed with costs of plaintiffs and 2nd defendant.

Benson, J.

6. I concur.