Best Sellers Retail (India) Pvt. Ltd. vs Aditya Birla Nuvo Ltd.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2012 Supreme(SC) 364

IN THE SUPREME COURT OF INDIA
A.K. Patnaik and Swatanter Kumar, JJ.
Best Sellers Retail (India) Pvt. Ltd.
Vs.
Aditya Birla Nuvo Ltd. and Ors.
Civil Appeal Nos. 4313-4314 of 2012 (Arising Out of SLP (C) Nos. 34627-34628 of 2010)
[Alongwith Civil Appeal No. 4315 of 2012 (Arising Out of SLP (C) No. 34839 of 2010)]
Decided On: 08.05.2012

Advocates appeared:
For Appellant/Petitioner/Plaintiff: Altaf Ahmed, A.K. Ganguly, Sr. Advs., Vikram Gurunath, Balaji Srinivasan, Jaikriti S. Jadeja, G. Vikram and S. Srinivasan, Advs.
For Respondents/Defendant: K.K. Venugopal, Sr. Adv., Harish V. Shankar, Gopal Shankaranarayanan, Rajesh D.M., Jyothi V.K., Ansar Ahmad Chaudhary and Madhusmita Bora, Advs.

Headnote:Civil Procedure Code, 1908–Order 39, Rules 1 and 2–Specific Relief Act, 1963–Section 37–Interim injunction–Temporary injunctions are to be regulated by CPC and not by provisions of Specific Relief Act–Even where prima facie case is in favour of plaintiff Court will refuse temporary injunction if injury suffered by plaintiff on account of refusal of temporary injunction was not irreparable–Order of temporary injunction set aside. (Paras 12, 14, 17 and 18)
153 ER 1316; (1857) 16 M. & W. 569; (1992) 1 SCC 719–Relied.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

The case involves a dispute over a contract of agency and the enforceability of specific performance of that contract, with considerations of temporary injunctions and the applicable legal provisions (!) (!) .
The respondent filed a suit seeking specific performance of an agreement and, in the alternative, damages for financial losses incurred due to breaches of the agreement (!) .
The court examined whether the agreement could be specifically enforced, considering provisions that restrict enforcement of contracts that are dependent on personal qualifications, involve continuous duties, or are determinable in nature (!) (!) (!) .
The court emphasized that temporary injunctions are to be regulated by the Civil Procedure Code, and not solely by the provisions of the Specific Relief Act, and that the principles for granting such injunctions include a prima facie case, balance of convenience, and irreparable injury (!) (!) .
The courts analyzed whether the plaintiff would suffer irreparable injury if the injunction was denied, noting that damages can be an adequate remedy in commercial disputes, and that the claimed damages included projected profits, loss of goodwill, and expenses related to relocating the business (!) (!) .
The court considered the contractual terms, including warranties of ownership and the duration of the agreement, and whether the agreement was determinable or had expired, impacting the enforceability of specific performance (!) (!) .
The importance of third-party interests and possession of the property was highlighted, with the court noting that injunctions should not be granted if the possession has already been transferred to a third party, unless proper parties are impleaded (!) .
Ultimately, the court found that the conditions for grant of temporary injunctions were not satisfied, particularly because the injury to the respondent was primarily financial and could be compensated by damages, and therefore, the injunctions were set aside (!) .

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JUDGMENT

A.K. Patnaik, J.

1. Leave granted.

2. These are appeals by way of special leave under Article 136 of the Constitution of India against the judgment and order dated 25.08.2010 of the High Court of Karnataka in MFA No. 4060 of 2010 and in M.C. No12036 of 2010 and in M.C. No. 12036 of 2010.

3. The relevant facts briefly are that Aditya Birla Nuvo Ltd., Respondent No. 1 in both the appeals, filed a suit O.S. No. 1533 of 2010 against Liberty Agencies, a partnership firm and its partners, in the Court of the City Civil Judge at Bangalore. The case of the Respondent No. 1 in the plaint was as follows: The Respondent No. 1 was engaged in the business of readymade garments and accessories under various reputed brand names and in the year 1995 had appointed Liberty Agencies as an agent to conduct its business of readymade garments and accessories with the reputed brand name 'Louis Philippe'. Thereafter, on 02.03.2005 Respondent No. 1 entered into a fresh agreement with Liberty Agencies under which Liberty Agencies agreed to sell the products of the Respondent No. 1 in the suit schedule property and also agreed to retain the possession of the suit schedule property until the expiry of the term of agreement and Liberty Agencies was not to sell any other articles or goods other than that supplied by the Respondent No. 1. Under the agreement dated 02.03.2005 (for short 'the agreement'), Liberty Agencies was entitled to a fixed commission of Rs. 7,50,000/- per month and by an addendum dated 01.07.2008 the fixed commission payable to Liberty Agencies was increased to Rs. 9,62,500/-. Thereafter, the Respondent No. 1 notified to Liberty Agencies various breaches of the terms and conditions of the agreement but Liberty Agencies did not set right the breaches. As a result, the Respondent No. 1 suffered huge financial losses. The Respondent No. 1 issued a legal notice on 06.02.2010 calling upon Liberty Agencies to comply with the terms of the agreement. Liberty Agencies, however, sent a letter dated 26.02.2010 claiming that the constitution of the partnership firm has changed and that its partner A.C. Thirumalaraj had retired and that A.C. Thirumalaraj as the owner of the suit schedule property had terminated the tenancy of the suit schedule property in favour of Liberty Agencies and initiated a collusive eviction proceeding with an intention to defeat the claim of the Respondent No. 1. The Respondent No. 1 thus prayed for specific performance of the agreement and in the alternative for damages for expenses and losses amounting to Rs. 20,12,44,398/- if the specific performance of the agreement was refused by the Court.

4. Along with the suit, Respondent No. 1 also filed an application under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure (for short 'the Code of Civil Procedure') praying for a temporary injunction restraining the Defendants from leasing, sub-leasing, alienating or encumbering the suit schedule property in any manner pending disposal of the suit. Liberty Agencies and A.C. Thirumalaraj filed their objections to the application for temporary injunction and stated, inter alia in their objections that the possession of the suit schedule property had been delivered to Best Sellers Retail (I) Pvt. Ltd. The Additional City Civil Judge heard the parties and by order dated 24.04.2010 allowed the application for temporary injunction and restrained Liberty Agencies and its partners including A.C. Thirumalaraj from leasing, sub-leasing, alienating or encumbering the suit schedule property in any manner pending disposal of the suit.

5. Aggrieved, A.C. Thirumalaraj filed a Miscellaneous Appeal under Order 43 Rule 1 of the Code of Civil Procedure against the order of temporary injunction before the High Court. While the Miscellaneous Appeal was pending, it was brought to the notice of the High Court in I.A. No. 1 of 2010 that in spite of the temporary injunction granted in favour of the Respondent No. 1, A.C. Thiruma

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2012 Supreme(SC) 364

Cases Referred (4)