Cases Referred:

Advocates Appeared:
D.MUKHERJI, GULAM MUSTAFA, HIRAK MITRA, INDIRA BANERJI, PRADIP GHOSH, R.N.JHUNJHUNVALA, URMILA NARANG

SHYAMAL KUMAR SEN, J.

( 1 ) THIS appeal is directed against the judgment and order passed by the learned 2nd Civil Judge, (Sr. Divn.)at Alipore in Title Suit No. 73 of 1998, being Order No. 9 dated 21. 11. 1998 whereby the learned 2nd Civil Judge, (Sr. Divn) has allowed the application for temporary injunction filed by the plaintiff/respondent herein on contest against the defendant No. I/appellant without any costs and made ad interim order of injunction dated 10. 11. 1998 absolute till the disposal of the suit. By the ad-interim order as also by the order under appeal the appellant has been restrained from starting booking of Matiz cars for sale without allotting cars in favour of the plaintiff. By the said order the learned 2nd Civil Judge, (Sr. Divn.) also dismissed the application filed by the defendant no. I/appellant seeking vacation of the ad-interim order. For the purpose of disposing of the appeal, which was by consent of the parties treated as on the day's list and heard along with the application for stay, it is necessary to set out the facts in short : -on 18 7. 1997. the Letter of Intent was issued by the appellant/defendant No. 1. On 7. 8. 1997, there were minutes of meeting between the appellant and the plaintiff/respondent No. 1 wherein it was agreed that the specifying action plan would be taken for activisation of dealership on 12. 9. 1997, the appdlant authorised respondent No. 1 to act as dealer to sell and service in the City of Calcutta. Pursuant thereto arrangements and preparations were made by the plaintiff/respondent No. 1 to act as dealer for Daewoo range of cars. On 3. 8. 1998. the appellant informed the respondent No. 1 that they should make available trainees for the purpose of sale of Matiz cars. It is also on record that on 18. 8. 1998 the plaintiff was informed that sales training programme for Mafiz would take place and it should sent its trainees at New Delhi. It appears that at one point of time on 25. 8. 1998 the appellant informed the plaintiff/respondent No. 1 that the plaintiff/respondent No. 1 has been selected for the purpose of Road show of Matiz and that the car would be on display in the show room of the plaintiff-respondent No 1 on 25th and 26th October 1998. Subsequently, however, the said Road show under the auspices of the respondent no. 1 did not take place as there were defaults on the part of the respondent No. 1 to carry out the obligations and conditions which were to be performed by the respondent No. 1. It may be noted that under the Letter of Intent the respondent No, 1 was to pay security deposit of Rs. 20 !acs. out of which only Rs. 5 lacs could be paid by the respondent No. 1, within 15 days from the date of the Letter of intent containing the terms and conditions of the dealership.

( 2 ) CLAUSE (9) of the said Letter of Intent provides as follows ;-"you shall deposit with the Company either a sum of Rs. 40 lacs as security deposit out of which Rs. 20 lacs is to be paid within fifteen days in form of Demand Draft favouring Daewoo Motors india Ltd. . and the balance of Rs. 20 lacs is to be paid whenever asked by the company or as on alternative Bank guarantee/mortgage to the tune of Rs 80 lacs You will be paid an interest on the deposit and the rate of the interest can be changed at the sole discretion of the Company. "

( 3 ) THE said clause specifically mention the amount which the respondent No. 1 was under an obligation to deposit as security deposit, cannot be disputed, Upto now only Rs. 5 lacs have been paid by way of security. The respondent No. 1 sought instalments to pay the arrear dues with regard to sale of Cielo cars effected by it to the extent of Rs. 33,88,525,50 p. It was outstanding for a considerable period of time. The respondent No. 1 paid such in stalments in time. The appellant then asked the respondent No. 1 to fill up the Letter of offer for the purpose of sale of Matiz cars and also to put in at least Rs. 15 lacs by way of security The respondent No. 1 initially did not comply with the terms for deposit of security in terms of Clause (9) of the Letter of intent and later when was called upon to do so pretended that the same is not necessary. It, therefore, appears that there is specific breach of the terms and conditions of the Letter of Intent by the respondent No. 1. This aspect of the matter, however, has been totally ignored by the learned Judge of the court below. It is well settled that the party, who seeks remedy must comply with all conditions of the agreement. We are surprised that although the respondent No. 1 who was the plaintiff before the court below committed breach of the terms and conditions of contract but even then was granted relief. The order was passed on the wrong principle of law. The learned court be-low presumed promissory estoppel is applicable in this case. when it did not at all apply. The following sentences of Halasbury will clarify the position. "agency by astoppel arises where one person has so acted as to lead another to believe that he has authorised a third person to act on his behalf, and that other in such belief enters into transactions with the third person within the scope of such stensible authority. In this case the first mentioned person is estopped from denying the fact of the third person's agency under the general law of estoppel, and it is immaterial whether the ostensible agent had no authority whatever in fact, or merely acted in excess of his actual authority. ' that apart, the said order on the face of it, in our view, creates a complete deadlock and interferes with the third party's interest with whom no privity of contract is there. There is no application of mind at all in regard to balance of convenience and incovenience. No case of negative covenant was found to exist, but still then the injunction was granted in the negative form.

( 4 ) MR. Mitra, however, tried to emphasize on the question of right to grant injunction on the basis of negative covenant under section 42 of the Specific Relief Act. In support of his contention he has relied upon a judgment and decision in the case of (1) Indian Charge Chrome Ltd. v. Tata Iron and steel Co, Ltd. , wherein construing the question involved in the said case and relying upon implied negative covenant in the agreement an order of status quo was directed to be maintained. The said principle decided in the said case, though cannot be disputed, in our view, does not apply to the facts of this case. In the instant case, we do not find on perusal of the agreement that there is any negative covenant either express or implied. Moreover, we have already noted that the plaintiff/respondent No. 1 committed breach of the conditions of Clause (9) of the Letter of Intent. Inspite of getting an opportunity to pay the balance security deposit amount and to fill up the Letter of Offer, so that it could act as dealer for Matiz cars, the plain tiff/respondent No. 1 failed to take advantage of the same. It has been strongly argued by Mr. Mitra relying upon the said decision that the respondent No. 1 is entitled to grant of injunction in the facts of the instant case. We are of view that the principles decided in the aforesaid decision cannot be made applicable to the facts of the instant case. In the instant case, admittedly, there is breach on the part of the respondent No. 1. Once having committed breach, the respondent No. 1 cannot enforce the agreement and obtain a relief in the form of mandatory injunction as was granted in this case by the Court below. Moreover, the said decision does not lay down any general principle that even if there can be adequate remedy by way of compensation even then injunction would be granted as a matter of course

( 5 ) CONSIDERING all aspects of the mattter, we are unable to accept the contention raised by Mr. Mitra.

( 6 ) MR. Ghosh, the learned advocate for the appellant, however, has relied upon the judgment and decision of the Division Bench of this court in the case of Republic Stores (Trade) v. Jagajit Industries Ltd. , wherein it has been held that no injunction can be granted for the specific performance of a contract which is determinate at the will of the parties. it is further held that if a mandatory injunction cannot be granted no temporary injunction can be granted in aid of the main relief which cannot be granted. The contract in question here is expressly terminable.

( 7 ) IN the facts and circumstances of that case, however, it was directed that the accounts should be furnished to the plaintiff every quarterly. In our view, essential requirements of in-junction are, primer facre case has to be made out and the question of balance of convenience and inconvenience has to be considered,

( 8 ) IN the instant case, we do not find any prima facie case for granting injunction since the plain tiff/respondent No. 1 has committed breach and was in default and failed to comply with the terms and conditions as already noted. The balance of convenience and inconvenience is also against the plain tiff/respondent No. 1 as inability to sell Matiz will render loss of profit to the plain tiff/respondent No. 1 as pleaded by it, which can always be compensated in money.

( 9 ) MR. Ghosh, the learned advocate has, however, submitted that his client is prepared to furnish statement of accounts in the court below in sealed cover.

( 10 ) ACCORDINGLY, we allow this appeal and set aside the judgment and order passed by the learned 2nd Civil Judge, (Sr. Divn.) at alipore. We, however, direct that the appellant will furnish quarterly statement of accounts in respect of sales of Matiz cars in Calcutta every quarterly in sealed cover in the court below. This order for furnishing of accounts in sealed cover in the court below will continue for a period of six months within which period it will be open to the respondent No. 1 to take appropriate steps in the court below for extension of the said period in accordance with law. There will be no order as to costs. The learned advocate for the respondent no. 1 prays for stay of operation of the order which is refused by us. The appeal and the application both stand disposed of by the order. Ghosh, J.-I agree. Appeal allowed.