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1998 Supreme(Bom) 428

IN THE HIGH COURT OF BOMBAY
(PANAJI BENCH)
R.M.S. Khandeparkar, J.
M/s. Sociedade de Fomento Industrial Ltd. others ..... Appellants.
Versus
Ravindranath Subraya Kamat others..... Respondents.
Appeal From Order No. 56 of 1998, decided on 5-8-1998.
Advocates appeared :
M.S. Usgaonkar, S.A. with Ku. A. Razak, for appellants.
U.S. Kolwalkar, for respondents.

Headnote:Order XXXIX, Rule 1-Relief Of Temporary Injunction sought pertaining to performance of negative covenant in the agreement arrived at between plaintiff and defendant No.1 -Order of rejection of application maintained on the ground that there was no balance of convenience in favour of plaintiff.

       Section 27-Restraint on trade-During subsistence of agreement between the parties restraint is enforceable.-Where the plaintiff/appellant company appointed defendant No. 1 as an advisor vide letter dated 13th July, 1995 on retainership of 15,000/- per month up to 7th September, 1998 along with certain other entitlements and on condition that the defendant No. 1 shall not undertake directly or indirectly by himself or by his family members or by any person as his agent any activity competing with the business of the plaintiff companies, the restraint being only for the period during the subsistence of the agreement between the parties, is not void under Section 27 of the Contract Act. The finding of the trial court that Clause 4 of the letter dated 13th July, 1995 was a restraint on trade and therefore, not enforceable could not be sustained and was liable to be set aside. AIR 1995 SC 2372, Rel. (Para 10).

JUDGMENT - R.M.S. Khandeparkar, J.:---This is an appeal against order dated 25th June, 1998, passed in Civil Miscellaneous Application No. 62/98/II in Special Civil Suit No. 37/98/II by IInd Additional Civil Judge, Sr. Division at Margao. By the impugned Order, the trial Court has dismissed the application filed by the appellants for temporary injunction against the respondents.

2.The appellants have filed a suit seeking the relief of permanent injunction to restrain the respondents from conducting the business activities similar to those of the appellants and in breach of Clause 4 of the appointment letter dated 13th July, 1995, and further for direction to pay an amount of Rs. 10,00,000/- with interest as well as an amount of Rs. 1,46,686/- with interest and for damages to the tune of Rs. 10,00,000/- with interest. The appellants also filed an application for temporary injunction along with the suit. The appellants filed the said suit on 20th February, 1998. After service of the summons on the respondents, an application for better particulars was filed by the respondents 18th March, 1998, which was replied to by the appellants on 27th March, 1998. On 2nd may, 1998, the respondents filed an application contending that they are unable to file any reply unless proper better particulars are furnished to them in terms of their application dated 18th March, 1998. The appellants thereupon, on 11th May, 1998, filed an application praying either for ex parte temporary injunction or for early hearing of the application for temporary injunction which the appellants had filed along with the plaint in the suit. On 18th May, 1998, the respondents filed their reply to the said application dated 11th May, 1998. The trial Court rejected the said application of the appellants on 21st May, 1998, which was subject-matter of the revision Application No. 94/98 before this Court and by Order dated 27th may, 1998, this Court has directed the trial Court to dispose of the application for temporary injunction as well as the application for better particulars on or before 25th June, 1998. The respondents filed their reply on 8th June, 1998, to the main application for temporary injunction and the appellants filed their rejoinder on the same day. The matter was finally disposed of by trial Court by its impugned order dated 26th June, 1998.

3.The case of the appellant/plaintiffs in brief, is that the plaintiffs constitute a group of companies and are engaged in various business activities which include production and export of mineral ores, transportation of mineral ore through water and road, real estate and civil constructions, Beach R

"If this is not sorted out, there could be problems with I.T. Department if I take up the issue which I may have to do to protect the interest of my wife and son as they are I.T. payers".

According to the plaintiffs, the two letters were an indication of the fact that the defendant No. 1 had already breached the clauses of the said letter of appointment, namely, Clauses 4 and 5 thereof and the plaintiffs therefore had apprehension that the defendant No. 1 would not hesitate to commit breach of other clauses thence further also. The said correspondence was followed by further correspondence between the parties. Consequent to the said correspondence, certain enquiries were made by the plaintiffs which revealed that the defendant No. 1 had started real estate, land development and civil construction business under the name and style of M/s. Eclectic Homes Ltd., the defendant No. 5, which business was similar to that which was being carried out by the plaintiff No. 1's Company namely Fomento Engineering as also by plaintiff No. 11 namely Fomento Resorts and Hotels Pvt. Ltd. The enquiries further revealed that the defendant No. 1 had also started the business of sub-distributorship of two-wheeler, Kinetic Honda Scooters and its spare parts having show room of Kinetic Honda at Margao under the name and style of M/s. Noble V


























































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