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1961 Supreme(Pat) 20
PATNA HIGH COURT
V.Ramaswami and Kanhaiya Singh JJ.
Hemraj Kapoor
Versus
Seventeen Textile Traders (India)
Appeal From Original Order No. 311 of 1960 ;
Decided On : FEBRUARY 02, 1961
In a suit for specific performance of a contract, the court must consider the balance of convenience and whether pecuniary compensation would be an adequate remedy for the plaintiff before granting an injunction.
Headnote:
INJUNCTION - SPECIFIC PERFORMANCE - MACHINERY SALE CONTRACT - BALANCE OF CONVENIENCE - SECTION 12 AND 21 OF THE SPECIFIC RELIEF ACT - ADEQUATE REMEDY - IRREPARABLE INJURY - UNDERTAKING BY APPELLANT - APPEAL ALLOWED.
Fact of the Case:
Plaintiff, a textile trader, sued defendants for specific performance of a contract for the sale of certain machineries. The plaintiff claimed that it had entered into a contract with the defendants for the purchase of the machineries, but the defendants had subsequently sold the machineries to the appellant, Hemraj Kapoor. The plaintiff sought an injunction restraining the defendants from transferring or otherwise dealing with the machineries during the pendency of the suit.
Finding of the Court:
The court found that the plaintiff had a prima facie case, but that the balance of convenience was in favor of the appellant. The court also found that pecuniary compensation would be an adequate remedy for the plaintiff, and that specific performance of the contract could not be enforced under Sections 12 and 21 of the Specific Relief Act.
Issues: 1. Whether the plaintiff had a prima facie case for specific performance of the contract. 2. Whether the balance of convenience was in favor of the plaintiff or the appellant. 3. Whether pecuniary compensation would be an adequate remedy for the plaintiff.
Ratio Decidendi: 1. The court held that the plaintiff had a prima facie case for specific performance of the contract, as there was evidence that the plaintiff had entered into a contract with the defendants for the purchase of the machineries, and that the defendants had subsequently sold the machineries to the appellant. 2. The court held that the balance of convenience was in favor of the appellant, as the appellant had paid Rs. 30,000 for the machineries and would suffer irreparable injury if the injunction were granted. The plaintiff, on the other hand, had not incurred any expenditure on the machineries and could obtain similar machineries from foreign countries within a reasonable period of time. 3. The court held that pecuniary compensation would be an adequate remedy for the plaintiff, as the machineries were movable properties and there was no evidence that monetary compensation would not be sufficient.
Final Decision: The court allowed the appeal and set aside the injunction order granted by the lower court. The court also directed the appellant to furnish a bank guarantee of Rs. 30,000 in favor of the lower court prior to the removal of the machineries from Bhagalpur to Amritsar.
Kanhaiya Singh, J.
1. This is an appeal by Hemraj Kapoor, defendant No. 8, from the order of the Subordinate Judge, Bhagalpur, dated 19th September, 1960, restraining the appellant and the other defendants respondents from transferring, removing or otherwise dealing with, the machineries in question. The facts relevant for the disposal of this matter may be shortly stated.
2. The plaintiff is Messrs Seventeen Textile Traders (India), having its head-office at 50, Court Road, Amritsar. Defendants Nos. 1, 9 and 3, who form a joint Mitakshara Hindu family, are owners of the firms Kunjalal Ganpatram) defendant No. 4, and Rama Silk Mills, defendant No. 5. They are all arrayed as the defendants first party.
The defendant second party is Hemraj Kapoor, one of the partners of Arun Spinning Mills, Lekha Park, Maqbool Road, Amritsar, who is the appellant before us. On 19th September, 1959, the defendants first party purchased from the Central Jail. Bhagalpur, certain machineries, namely, one set of carding Machine, one set of woollen Mule and one Willow Machine, which form the subject-matter of the present litigation. On 5th June, 1960, the appellant for and on behalf of Arun Spinning Mills aforesaid entered into a contract oi sale of the said machineries with the defendants first party. It was agreed between them that the appellant would purchase the machineries for a sum of Rs. 30,000 and would take delivery of the same on payment of the agreed price.
On 24th August, 1960, the agreed price was paid by means of a bank draft on the State Bank of India, Bhagalpur, and the defendants first party granted a duly stamped receipt of even date, acknowledging the receipt of the sum of Rs. 30,000. On the same day, the appellant obtained delivery of the machineries and stored them in an open shed belonging to Kunjalal Sharma, defendant No. 1, which he had rented for the purpose for a period of three months at a monthly rental of Rs. 25. The machineries are still lying there.
3. On 27th August, 1960, the present suit was brought by the plaintiff for specific performance of contract against the defendants first party. The plaintiff also admits that there was a contract of sale on 5th June, 1960. Its case is that this contract was in fact made for and on behalf of it. The fact is, and there is no dispute, that the contract was actually made by the appellant. It is also not in dispute that the appellant paid Rs. 30,000 to the defendants first party and obtained delivery of the machines which fie has kept in a shed belonging to defendant No. 1.
The case of the plaintiff is that it wanted to start a mill business under the name and style of Arun Spinning Mills at Amritsar and started negotiations with the defendant first party for the purpose of the said machineries through its attorney, Sri Kishunchand, and ultimately on 5th June, 1960, the defendants first party contracted to sell the said machineries to the plaintiff for Rs. 30,000 and as a part price of the same the plaintiff paid the defendants first party Rs. 2,000 through its attorney, the aforesaid Sri Kishunchand, and it was agreed that the balance of Rs. 28,000 would be paid at the time of the delivery of the said machineries in about three months.
The plaintiff further alleged that the appellant was a mere personal assistant of Sri Kishunchand and came to Bhagalpur with him in order to do minor works relating to the said purchase and that subsequently the appellant played false and entered into contract himself with the defendants first party. This the plaintiff discovered when its persistent efforts to obtain delivery of the machineries on payment of the balance of the sale price to the defendants first party failed. It is alleged that the defendants first party are in collusion with the appellant, and the non-performance of the contract by the defendants first party has put it to great loss as the machineries in question are not readily available at present in India. The defendants
