2001 PLP 568 (YLR)

Ashtar Ausaf Ali for Appellant. S.M. Masud and Muhammad Amin Shad for Respondent. Date of hearing: 11th May, 2001. This appeal is directed against the order dated 18-1-2001, passed by the learned Civil Judge, Faisalabad, restoring the supplies of the respondent, through an interim mandatory injunction.

2. Briefly stated that facts of the case are that on 23-11-2000, the respondent filed a suit for specific performance of a contract of agency allegedly executed by the appellant in favour of the respondent, in the month of September 1999 and in the alternative, for the recovery of Rs.47,16,139 as damages and compensation. It is averred in the plaint that the respondent used to do the business of distribution of Coca Cola Beverages since 1972, on the basis of commission in a part of Faisalabad City. During the above period, from 1971 to 1982, Coca Cola Beverages was owned by Messrs Khawaja Naseem Ahmad and Aizad Hassan. From 1982 to September, 1999, it was owned by Ch. Shahid Nazir, who in the month of September, 1999, sold the' said manufacturing unit to the appellant. In spite of the change of ownership, all the owners kept the relationship of the agency intact. Besides, the appellant, also executed an agency agreement with the plaintiff/ respondent in September, 1999. The plaintiff/ respondent was allocated the Route No.10 of Faisalabad City for the supply of the products of Coca Cola Beverages in the area of People's Colony, Tariqabad, Mansoorabad, District Courts, Railway Colony and Civil Lines opposite Nigina Cinema. The plaintiff/ respondent had invested Rs.40,00,000 in the business having purchased two Mazda vehicles, the empty bottles crates and plastic shells etc. and had also established an office and a godown and employed certain persons for the above business.

3. As per the practice, the plaintiff used to send the empties to the factory of the appellant alongwith the price of the liquid. The appellant after receiving the cash from the respondent, used to hand over the filled bottles for supply to the allocated area. On 19-10-2000, the plaintiff through his employee, sent the empty crates and plastic shells for its filling up, but this was refused by the appellant on the pretext that agency agreement of the plaintiff/respondent has been rescinded. In the light of above facts the plaintiff/respondent sought a decree for specific enforcement of the alleged agreement of agency and in the alternative, claimed relief of the damages. Alongwith the suit, an application for the grant of temporary injunction was also moved with the following prayer:-- "It is, therefore, prayed that the respondent may kindly be restrained from conducting the direct supply of the Coca Cola Beverages, Faisalabad products in Route No. 10, Faisalabad and further they be ordered to restore the supply of the applicant agency for its onward sale by the applicant in Route No. 10, Faisalabad till the decision of the suit. "

4. The suit and application were contested by the appellant through filing their written statement and written reply thereto. In the written statement, a specific defence was taken that there was no agency agreement between the parties either written or oral. The respondent as practice, used to purchase the products of the appellant on the payment of the price of such products. As certain amount is due from the respondent, therefore, the appellant had terminated the arrangement of supply to him. It was specifically mentioned in the written statement that the alleged agreement, is not enforceable under the law.

5. The learned Civil Judge, vide impugned order, finding the respondent having an prima facie case and irreparable loss and balance of convenience in his favour, directed the appellant to restore the supply of the respondent. It is expedient that the direction given in the impugned order be reproduced, which is as under:-- "The plaintiff has got a good arguable case. The plaintiff is entitled to the grant of interim/ mandatory injunction. His application for the grant of interim/ mandatory. injunction till the final disposal of the case is accepted. The defendants are directed to restore the supply of their Beverages to the plaintiff at once. They are further directed to continue it till the final disposal of the suit. Moreover, they are restrained from conducting direct supply of Coca Cola Beverages at Faisalabad in Route No. 10, Faisalabad City."

6. The learned counsel for the appellant contends that there was no agency agreement between the parties; the respondent had failed to establish that the alleged agency could not be terminated, in view of the provisions of section 202 of the Contract Act; the mandatory injunction in the facts and circumstances of the case, could not be granted; the suit for specific performance was not competent, therefore, there is no valid justification for the grant of any interim relief in the shape of mandatory injunction to the respondent.

7. Conversely, the learned counsel for the respondent has reiterated that there was valid agency agreement between the parties. The respondent had invested huge amount for the purpose of accomplishing the objects of the agency and thus, in the light of section 202 of the Contract Act, the respondent had interest in the subject-matter of the agency, which could not be revoked. It is also submitted that in the facts and circumstances of the case, the respondent was entitled to the restoration of the supply as the action of the appellant was absolutely illegal and in breach of the rights of the respondent and also the provisions of section 202 of the Act ibid.

8. I have heard the learned counsel for the parties. The respondent claims that there is an written agency agreement between the parties; but he has failed to place on the record any such agreement, though it is stated in the plaint that such agreement is in possession of the appellant, but, no effort was ever made using the process of the Court to seek the production of the said document. It may be pertinent to state here that the appellant in rebuttal, has totally denied if any agency agreement was executed between the parties, therefore, in the absence of such document on the record, it is to be seen, if from the facts and circumstances, of the case, any agency contract has been prima facie established. The case of the respondent is, that he used to send the empties to the appellant and on the payment of cash amount, these empties were filled and the respondent used to make the supplies to the various retailers within Route No.10. This clearly shows that the arrangement between the parties was for the sale and purchase of the goods. The proprietary in the goods, once those were supplied to the appellant; passed to the respondent. According to the provisions of section 182 of the Contract Act, 1872, "an agent is a person employed to do any act for another or to represent another in dealing with third persons". However, in view of the arrangement between the parties mentioned above, the respondent was not acting as an agent, rather was a favourite buyer of the appellant, who was assigned a particular area to further sell the products manufactured by the appellant. In any case, the respondent was not acting for or on behalf of the appellant to bind the appellant as the principal qua the persons to whom, such product was sold. This view is supported by Hope Prudhomme & Company v. Hamel and Horley Ltd: (1925 Privy Council page 161), Messrs World Wide Trading Co. v. Sanyo Electric Trading Ltd. and another (PLD 1986 Kar. page 234) and Messrs Caltax Oil (Pakistan) Ltd., Karachi v. Sheikh Rehan-ud-Din (PLD 1958 (W.P.) Lahore page 63).

9. In order to attract the provisions of section 202 of the Contract Act, it is sine qua non that there may be an agency agreement between the parties, but in the instant case, as it has been held that the respondent was not an agent for the appellant, rather was a favourite buyer, therefore, the question that the respondent had any interest in the subject-matter of the agency, which could not be terminated by the appellant, does not arise.

10. The appellant was simply selling its products to the respondent purely on the sale/purchase basis, and even if there was any verbal agreement between the parties in this behalf, which has been terminated by the appellant, the respondent in law, cannot seek the enforcement of such an agreement, in view of the explanation to section 12 read with section 21 of the Specific Relief Act. At the best, in the circumstances of the case, the respondent can maintain an action for claiming the damages on account of illegal termination of the contract for the sale/purchase of the goods. Therefore, the suit for specific performance filed by the respondent was incompetent and as per the provisions of section 54 read with section 56(f) of the Specific Relief Act, where a contract is not specifically enforceable, there is no question for the grant of a perpetual injunction. In case, when the perpetual injunction cannot be granted, in law, no temporary injunction can be allowed to the party complaining against the breach of such a contract. Thus, the learned trial Court has fallen in serious error in allowing the temporary relief to the respondent restraining the appellant from the disposal of their products in the area which was earlier assigned to the respondent.

11. As regards the other relief, granted to the respondent, by the learned Civil Judge, restoring the supply of goods, it is in the form of a mandatory injunction, which power is to be exercised in very exceptional and rare circumstances, subject to the conditions, laid down in section 55 of the Specific Relief Act, requires that mandatory injunction can only be granted, where breach of an obligation is capable of specific enforcement by the Court. In the instant case, as the agreement alleged by the respondent, has been held not to be specifically enforceable, consequently, the learned Court has erroneously, directed the appellant to restore the supply to the respondent in the form of a mandatory/injunctive relief. The argument of the learned counsel for the respondent that the above relief granted to the respondent is not in the form of mandatory injunction, is not supported by the record. Because, the respondent in his plaint has clearly mentioned that his supplies have been stopped by the appellant much prior to the filing of the suit, therefore, the direction to the appellant to restore the supplies undoubtedly, is in the form of mandatory induction and this is also clearly mentioned in the operative part of the impugned order, reproduced above. The present case was not of the nature in which, the trial Court exercised its discretion to grant the relief of mandatory injunction.

12. The other submission of the learned counsel for the respondent that the respondent shall suffer an irreparable loss and inconvenience in case the supplies are not restored, suffice it to say, that the suit for specific performance filed by the respondent, as has been held, was not competent, and being conscious of this fact, the respondent has sought the relief of damages/compensation in the suit. It is only the second part of the relief, which the respondent could be entitled after succeeding to show that the arrangement of supply of the goods by the appellant to the respondent was in breach of the contract of the sale of goods, and thus, the respondent has suffered damages on account of that. In the light of what bas been stated above, this appeal is allowed. The impugned order of the learned Civil Judge dated 18-1-2001 is set aside. The application of the respondent under Order 39, Rules 1 and 2, C.P.C. is dismissed. No order as to costs. M.B.A./C-96/L Appeal allowed.