Delhi High Court
Airport Authority Of India vs Dilbagh Singh on 28 January, 1997
Equivalent citations: 1997IAD(DELHI)722, AIR1997DELHI340, 65(1997)DLT625, 1997(40)DRJ518, AIR 1997 DELHI 340, (1997) 40 DRJ 518
Author: M.S.A. Siddiqui
Bench: M.S.A. Siddiqui
JUDGMENT
1. This appeal under Order 43 Rule 1, CPC is directed against the order of the Additional District Judge, Delhi dated 30th September, 1996 in Civil Suit No. 168/96.
2. The appellant/defendant invited tenders for execution of certain work and the respondent/ plaintiff submitted the tender. The tender submitted by the respondent was accepted by the appellant and the letter of acceptance dated 13-2-1996 containing certain terms and conditions of the contract was conveyed to the respondent. Formal contract was executed on 29-2-1996. The appellant terminated the contract vide letter dated 13-9-1996. Aggrieved by the said action, the respondent filed a suit for mandatory injunction against the appellant. Along with the plaint, the respondent also filed an application under Order 39, Rules 1 and 2 for an ad interim injunction restraining the, appellant from terminating the contract. The learned trial Court by the impugned order dated. 30th September, 1996 after hearing the parties, granted an ad interim injunction as sought by the respondent. Aggrieved by the order, the appellant has now come up in appeal before this Court.
3. Learned counsel for the appellant has assailed the impugned order on the following grounds:--
(a) That the contract in its nature was determinable and according to Section 14(1)(c) of the Specific Relief Act (for short 'the Act') such a contract cannot be specifically enforced, the plaintiff's suit for permanent injunction to prevent the breach of the contract is barred under Section 41(e) of the Act;
(b) That since a breach of the contract of this nature can always be compensated in money, the plaintiffs suit for permanent injunction is not maintainable.
4. At the outset, I must make it clear that ordinarily it is not open to the appellate Court to substitute its own discretion for that of the trial Court. But if it appears to the appellate Court that in exercise of its discretion the trial Court has acted unreasonably or capriciously or has ignored the relevant facts and has adopted an injudicious approach then it would certainly open to the appellate Court to interfere with the trial Courts discretion. It is well settled that the granting of ad interim injunction is purely within the discretion of the Court but the discretion has to be exercised in accordance with the sound judicial principles the principles which govern the exercise of the discretion are that the party claiming ad interim injunction should establish that it has a prima facie case; that interference by the Court is necessary to protect it from an irreparable injury and that the balance of convenience is in its favour. It has also to be borne in mind that the general principles governing the grant of ad interim injunction and those governing the grant of perpetual injunctions are similar.
5. The case of the plaintiff/ respondent is that the contract awarded to him continued till date as it was operative for a period of three years and the defendant/ appellant committed breach of terms of the contract by terminating it vide letter dated 13-9-1996. On the contrary, the case of the appellant/ defendant is that the contract that commenced on 16-2-1996 was to be operative only for a period of one year. It was contended by the learned counsel for the appellant that the appellant had reserved the right to terminate the contract and according to Section 14(1)(c) of the Act such a contract cannot be specifically enforced, and as such the plaintiff's suit for injunction to prevent breach of such a contract is barred under Section 41(e) of the Act. It was also contended by the learned counsel that a breach of the contract of this nature can always be compensated in money, the plaintiff's suit for injunction is not maintainable and the learned trial Court has committed a patent illegality in granting ad interim injunction in favour of the respondent.
6. It is beyond the pale of controversy that the contract in question was determinable. Admittedly, the tender submitted by the respondent was accepted by the appellant and he letter of acceptance dated 13-2-1996 containing certain terms and conditions of the contract was conveyed to the respondent. The respondent had also accepted the terms and conditions contained in the said letter vide letters dated 14-2-1996 (Annexure A-2) and 29-2-1996 (Annexure A-3). Formal contract was executed on 29-2-1996 and it was stipulated therein that me letter dated 13-2-1996 shall form part of the agreement. It follows that there was consensus ad idem to the terms and conditions mentioned in the letter dated 13-2-1996. It was specifically mentioned in the letter dated 13-2-1996 that the award of contract was subject to the condition that in case mere was a Court order/CBI/Vigilance report against the credentials of the plaintiff, the contract shall be liable to be terminated forthwith. That apart, Clause 2 of the agreement dated 19-2-1996 clearly shows that the appellant/ defendant had reserved the right to terminate the contract without assigning any reason. Under Section 14(1)(c) of the Act, a contract which is in its nature determinable cannot be specifically enforced, if a contract cannot be specifically enforced because it is covered under Section 14(1)(c) of the Act, no injunction can be granted to prevent breach of such a contract. Section 41(e) of the Act clearly lays down that an injunction cannot be granted to prevent the breach of a contract the performance of which would not be specifically enforced. What is prohibited by Section 41 cannot be mitigated by invoking provisions of Section 38 of the Act. In the instant case, the respondent under the guise of ad interim injunction wanted specific performance of the contract which could not be granted by virtue of the provisions of Section 14(1)(c) read with Section 41 of the Act. I have no hesitation in coming to the conclusion that the plaintiff/ respondent has failed to make out a prima facie case for grant of ad interim injunction.
7. As staled earlier, the plaintiff/ respondent came with a specific plea that the contract was for the period of three years, while the appellant/ defendant contends that it was for the period of one year. The letter dated 13-2-1996, which formed part of the agreement, prima facie shows that the contract was in fact offered for the period of one year. Clause (2) of the agreement dated 29-2-1996 also supports the appellant's contention that the contract was to be operative only for a period of one year. However, if the respondent ultimately succeed in establishing that the contract was for three years and not for one year, he could be compensated in terms of money. Since a breach of the contract of this nature can always be compensated in money, balance of convenience is not in favour of the respondent and it cannot be said that irreparable loss or injury will be caused to the respondent. In this view of the matter, the respondent/ plaintiff was not entitled to the grant of ad interim injunction.
8. For the reasons discussed above, I am constrained to observe that the learned Addl Distt. Judge has unfortunately grossly failed in keeping before his mind the requirements of law, which are associated with his power to exercise jurisdiction, namely, whether to grant or not to grant interim injunction. Thus he has committed a patent illegality in clutching at the jurisdiction, when the jurisdictional fact itself showed that he had no authority to grunt such an injunction.
9. In the result the appeal is allowed and the impugned order dated 30th September, 1996 is hereby set aside. Respondent shall pay the costs of me appellant and bear his own. Counsel's fee is fixed at Rs. 3,000/-.
10. Appeal allowed.