P (PLP)

The plaintiff‑respondents had entered into a contract for purchase of 17,000 gallons of rum from the Military Department 5.000 gallons direct and 12,000 gallons through defendant No. 1, Asghar and Lakeland, Commission Agents. The plaintiffs alleged that due to a false representation made by defendant No. 1, to the effect that the military required 3,000 gallons of rum out of the contract goods, for their own use, the plaintiffs agreed to surrender those 3,000 gallons in favour of the Military Department and sent four letters conveying this information to that department. Later on, plaintiffs learnt that the military did not need this rum but that the defendant No. I had arranged for the surrendered rum to be purchased by N. K. Gandhi, defendant No.

2. The surrender was described by the plaintiffs as not valid in law, being affected by fraud on the part of defendant No. 1, who were acting as commission agents for the plaintiffs. A suit was brought by the plaintiffs for an injunction to restrain defendant No. 2 from purchasing these 3,000 gallons of rum from the Military Department on the plea that the plaintiffs were still entitled to purchase this quantity from the military in accordance with the original contract. This suit was filed on the 26th August 1949. The plaint contained no imputation against the Military Department or against defendant No. 2 personally. An interlocutory injunction was also prayed for against defendant No. 2 for restraining him from purchasing this rum. The trial Court granted an ad interim injunction against defendant No. 2 Ex‑parte. In view of this injunction, defendant No. 2 obtained extension of the date of delivery of the 3,000 gallons from the Military Department. The trial Court was then approached for vacation of the injunction order, and this prayer was acceded to. An appeal to the District judge against the vacation of the injunction order, also failed. A revision application was filed in this Court and was dismissed. While the revision petition was pending in this Court, the plaintiffs, applied to the trial Court for amendment of their plaint so as to make out a case' that under their contract, they were not merely entitled to purchase the rum in dispute but that they had become owners of all the 17,000 gallons of rum. This petition was contested on behalf of the defendants. The counsel for the plaintiffs then made an oral request to the Court for permission to withdraw from the suit with liberty to file another suit. This permission was granted in spite of defendant's opposition. Against that order a revision petition is pending in this Court. The suit out of which the present appeal and the civil miscellaneous petition have arisen; Bias then brought by the plaintiffs on the allegation that they had become owners of all the 17,000 gallons under their contract, and as they were made to surrender a part bf this contract by a fraudulent representa tion made by defendant No. 1, in law, they were still owners of the surrendered rum. As defendant No. 2 had obtained delivery of this rum from the Military Department in the meantime, it was prayed that possession of the rum be given to the plaintiffs, or, in the alternative, damages which were assessed at rupees one lac and twenty thousand, should be awarded. It was alleged that defendant No. 2 knew of the fraud committed by defendants No. 1, ‑at the time that he took delivery of the rum from the Military Department. The trial Court issued an interlocutory injunction restraining defendant No. 2 from selling or dealing with this rum pending disposal of the suit. The appeal has been brought by N. K. Gandhi, defendant 2 and is directed against that order, and by the miscellaneous petition it is prayed that the injunction order be stayed, pending disposal of the appeal. It is settled law that the principles which should guide a Court in issuing an ad interim injunction are as follows :‑-- (1) There should at least be a Prima facie case in favour of the party asking for the injunction. (2) The Court should be satisfied that if the injunction is not issued, irreparable damage or injury would be caused to the party's interests in the property involved. (3) The balance of convenience is an important factor to be considered. Learned counsel for the respondents tried to argue that the principles governing the issue of permanent injunctions, as embodied in section 56 of the Specific Relief Act, should not be applied to the grant of a temporary interlocutory injunction. Under Order 39, rule 1, Civil Procedure Code, lie asserted, the Court had merely to be satisfied that the property, which was the subject matter of the suit, was in danger of being wasted, damaged or alienated by the opposite party, or wrong fully sold in execution of a decree, or that the defendant was threatening or intending to remove or disclose of his property with a view to defraud his creditors. Under rule 2 of Order 39, Civil Procedure Code, where the defendant was to be restrained from committing a breach of contract or other injury of any kind, according to learned' counsel, different considerations might arise. As the interlocutory injunction in the present case had been issued under Order 39, rule 1, ‑ Civil Procedure Code, learned counsel for the respondents contended that no question of irreparable damage was pertinent to the case. In support of his position, learned counsel relied upon Raghbar Dayal Misra and others v. Shankar Lal and others (A. I. R. 1934 All. 876) and District Board, Farrukhabad v. Ikhlaque Hussain (A. I. R. 1933 All. 86). These authorities lay down that the provisions of section 56 of the Specific Relief Act cannot be made to apply to a temporary injunction which is governed by the provisions of Order , 39, Civil Procedure Code. But so far as this Court is concerned some of the principles underlying the provisions of section 56 of the Specific Relief Act have been consistently invoked while considering the propriety of issuing a ' temporary injunction under Order 39 rules 1 and 2, Civil Pro cedure. Reference in this connection may be made to Malik Sohara Khan and others v. Ahmad Khan and others (57 P. R. 1899), Rameshwar Das v. Yakin‑ud‑Din (A. I. R. 1924 Lah. 633),‑ Manohar Lal v. Jai Narain (A. I. R. 1920 Lah. 436), Chet Ram v. Hari Bakhsh (A. I. R. 1926 Lah. 435), Kunj Behari Lal v. 141st. Mubarik Begam (A. I. R. 1927 Lah. 833 (2) and N. W. Ry. Administration v. N‑. W. Ry. Union (A. I. R. 1,933 Lah. 203). A similar view was expressed in Brajendra Nat& v. Kashi Bai (A. I. R. 1946 Pat. 177‑D. B.) and Begg, Dunlop & Co. v. Satish Chandra Chatterjee (I. L. R. 46 Cal. 1001‑D. B.). The preponderance of authority therefore is in favour of the proposition that considerations applying to the issue of permanent injunction would be relevant when the pro priety of issuing a temporary injunction is in question. The question of irreparable injury or the balance of convenience would, therefore, be, pertinent to, the case. The issue of a temporary injunction is after all a discretionary relief and neither on principle nor on authority, I can see any objection to seek ing guidance from the principles underlying section 56 of the Specific Relief Act, while considering its propriety. Learned counsel for the respondents then advanced the argument that the appellate Court ‑should not interfere with the exercise of discretion within the bounds of its jurisdiction, by a Court of first instance. He relied on certain observations in Ex parte Merchant Banking Company of London Ira re. Durham (16 Ch.D .623 1881) at p.

636. Learned, counsel also quoted certain passages from Woodroffe on Injunctions and Basu on Injunctions pages 170 and 66 respectively. The principle of non‑interference with the normal exercise of a judicial discretion is well recognized. But the relevant consideration is whether that discretion has been exercised on judicial principles or not, and for that purpose we have to examine all the circumstances oil the case. Learned counsel for the appellant has argued that the plain tiffs had not much of a prima facie, much less a strong case, in their favour. He has pointed out that they had shifted their ground in the present suit as compared with the plaint in there first suit which was withdrawn. Now the plaintiffs' contention is that there was a completed contract in their favour, whereas in the first suit they bad set up merely a right to purchase the rum in question. No fraud has been imputed to defendant No. 2 in this case, and even if defendant No. 1 had been guilty of fraudulent conduct in making a false representation to the plaintiffs to persude them to surrender a part of their con tract in favour of the Military Department, it is contended that defendant No. 2, when he entered into his contract with the Military Department for the purchase of the 3,000 gallons of rum, could have no knowledge of the sellers defective title. It is urged that the principle of estoppel was attracted to the case and therefore defendant No. 2 could not be deprived of the rum. It is further pointed out that a contract affected by fraud is only voidable and not void ab initio. These no doubt are weighty considerations. On the other hand, learned counsel for the respondents has emphasised that the first suit of the plaintiffs had already been filed on the 26th August 1949, and although defendant No. 2 had entered into a contract with the Military Department on the 16th August 1949, it was only on the 2nd September 1949 that he got a permit from the Excise Department for the purchase or transport of this rum and that was one of the Essential terms on which tie completion of the contract was contingent. However, it is clear that in the first suit, the only notice defendant No. 2 had of plaintiffs' claim, was based on an allegation that there was an agreement in plaintiffs' favour to purchase the rum and not that there was a completed contract of sale. The second suit was filed after defendant No. 2 had obtained delivery of the rum in question. There is thus a good deal of force in the contentions raised by learned counsel for the appellant, but I would not like to express any final opinion on the merits of the case for the respondents. Learned counsel for the 'respondents contended that there was a completed contract in favour of his clients under section 20 of the Indian Sale of Goods Act, as the barrels of rum, which were to be handed over, had been specifically appropriated to the contract. There was a clause in the agreement with the Military Department, stipulating that 'the goods had been sold as they lay and on the understanding that the purchasers had thoroughly inspected them. On the contrary, learned counsel for the res pondents pointed out that there was no evidence on the file to show that the Military Department possessed only the 17,000 gallons of rum which the plaintiffs had contracted to purchase and further that the purchase had been made in instalments, namely, 5,000 gallons at one time and 12,000 gallons at another: Learned counsel for the appellant, therefore, suggests that pro perty in the goods contracted for, did not pass till the quantity of rum had been measured. He also drew my attention to a clause in the agreement to the effect that the rum had to con form to a certain standard O. P.

130. He also stressed the fact that his client had given an affidavit to the effect that all the barrels that had been delivered to him were below this strength. To this learned counsel for the respondents has replied that the strength of the rum may vary but that it did not mean that the barrels delivered to defendant No. 2 were not part of the goods which were covered by the contract in favour of the plaintiffs. There is the further circumstances that accord ing to the contract between the plaintiffs and the Military Depart ment, the Pak Army was to be responsible for getting the permission from the Excise Department for the plaintiffs to purchase the rum and to transport it to their premises. These considerations no doubt are relevant but are not conclusive or cogent enough at this stage to enable me to decide the matter one way or the other. If, of course, there was no appropriation of specific goods to the contract or the completion of the contract was contingent on another condition being fulfilled subsequently, section 20 of the Indian Sale of Goods Act would not cover the case. Learned counsel for the appellant has also raised the points that the Court‑fees paid by the plaintiffs were deficient and that the original contract with the Military Department bore no stamp and was consequently inadmissible in evidence. He referred to them as relevant considerations when the propriety of an interlocutory injunction was being canvassed. Learned counsel for the plaintiffs‑respondents in reply urges that even if these technical defects existed, they could be set right with the permission of the trial Court and the suit would not fail on account of these defects. I agree that these would not be insuperable difficulties in the way of the plaintiffs. Learned counsel for the appellant tried to argue that the contract between the plaintiffs and the Military Department was itself void as it was not made in the name of the Governor -General as required by section 175 of the Constitution Act. In this regard, if there is a defect, both parties stand on the same footing. Apparently no formal contract was executed between the Military Department and either of the parties. Learned counsel for the appellant contends that if the contracts in favour of both parties are held to be void under section 175 of the Constitution Act, the result would be that the plaintiffs would not be entitled to get back the rum from defendant No. 2 who was in possession. Be that as, it may, I do not feel it necessary to express any opinion on the contention raised, as in my view the appeal should succeed on other grounds. As has been observed above, it cannot be said that the plaintiffs have a very strong case, but assuming that there is a prima facie case in their favour, it does not appear that, but for the issue of the impugned temporary injunction, they would sustain irreparable damage. By " irreparable damage " is meant such material injury as cannot be adequately compensated for in damages. I do not see that this is a case in which the plaintiffs could not be adequately compensated by award of damages if they eventually succeed in the suit. The property in suit consists of moveable whose price at any moment can be easily ascertained, so that there should not be much difficulty in asses sing the measure of damages. Moreover, the balance of convenience would, seem to lie in favour of vacating the injunction rather than retaining it. If the injunction stands, defendant No. 2 cannot dispose of the rum in which he has invested his money. The sale may thus be held up for a pretty long time, and in the meantime prices may fall. Moreover, as an affidavit presented on behalf of defendant No. 2 makes it clear, some of the barrels are leaking and it is apprehended that some‑of them may burst. In view of this condition of' the barrels I have permitted defendant No. 2 to have the rum transferred to bottles in the presence of a responsible excise official. My con clusion, therefore, is that the plaintiffs would neither sustain irreparable injury nor would any considerable in convenience be caused to them if the injunction is vacated. On the other hand, unnecessary loss may be incurred by defendant No. 2 if the injunction is allowed to stand. After giving my best considera tion to the facts of the case, I have come to the conclusion that the issue of a temporary injunction was not justified. I, therefore, allow the appeal and set aside the order passed by the trial Court in respect of the temporary injunction. The civil miscellaneous petition is thus automatically disposed of. The appellant will have his costs in this Court. Petitioner their counsel should be informed of this order. A. H. Appeal allowed.