In cases involving oral contracts for the sale of goods, where the contract is uncertain, inequitable, and there is a significant delay in filing suit, the balance of convenience may not favor the grant of an injunction.

( 1 ) THESE two appeals (Nos. FAO (OS) 185/84 and 186/84) are directed against the interim injunctions granted in the two suits entitled M/s. Mahesh Steel Traders v. M/s. Saral Trading Co. etc. , and M/s. Mahesh Steel Tranders v. Sehru Mall Jagdish Rai and Sons. The injunctions were granted ex parte and then confirmed in both the suits, and the final judgment is common to both suits. So, a single common judgment will be sufficient to dispose of both these appeals.

( 2 ) THE interim injunctions were granted in the two suits which were for specific performance of an agreement to sell 165 metric tons of CRC sheets in Suit No. 1361/84 and 160 metric tons of CRC sheets in the other suit on payment of the balance price. The restraint order was for preventing the defendant from selling, alienating or disposing of the goods to any other party except the plaintiffs.

( 3 ) THE sheets in questions were imported from the German Democratic Republic under an import licence. According to the plaintiffs, the entire quantity of imported sheets was to be sold to them at the rate of Rs. 5,750. 00 per metric ton. The contract was entered into in April, 1984, and under the agreement, certain amounts were paid to the defendants and also on their behalf to the transporter who brought the goods from Bombay to Delhi. The balance price was to be paid when the goods were to be lifted by the plaintiffs. The goods were stored at premises situated in Loha Mandi, Naraina, New Delhi. The Union Bank of India, Chandni Chowk, Delhi, had excercised its lien and put their lock and key on the godown. But, 75 metric tons of the material had been delivered to the plaintiffs. According to the plaintiffs, delivery orders had been given to take delivery of the material from the Bank, but,for some reasons, this could not be taken delivery of.

( 4 ) THE defendant s case was that they had never agreed to sell the goods to the plaintiffs and in fact they could not be sold because they are meant for actual use having been imported for consumption as a raw material for use in the defendant s industry. The Bankers who had advanced money against the goods were preventing the taking of delivery and had detained the goods at Bombay. When the goods arrived in Delhi, the Bankers refused to take delivery from the transporter. The defendants approached the plaintiffs to advance money for making payment to the transporter. This amount was advanced in view of old friendship. According to the defendants, therefore, the money was advanced on interest while the goods remained with the Bankers. The defendants had managed to pay Rs. 10,00,000. 00 to the Bankers, who released 75 metric tons of CRC sheets which were taken delivery of by Shri Khandelwal, who sent the goods to the defendants instead of giving them to the plaintiffs. The goods are such that they are not easily available in the market.

( 5 ) THE learned single Judge granted the injunction on the ground that there was a prima facie case borne out by the documents and especially when 74 or 75 tons of CRC sheets had already been given to the defendants.

( 6 ) IN support of these appeals, Mr. Bhatia has strongly contended that the injunction has disastrous results. According to him, the Bankers had behaved in an unreasonable. manner to prevent the release of the goods and there was litigation between the defendants and the Bank. The plaintiff- respondents had never filed any suit during the period of that litigation, but as soon as the defendant succeeded against the Bank, the suit had been instituted in August, 1984. He pointed out that a large sum of money was owed to the Bankers by the defendant which money had been borrowed for importing these very goods. This loan was rising by leaps and bounds every day. If the alleged contract was to be enforced, the defendants would be out of pocket by a huge amount.

( 7 ) KEEPING in view these circumstances we have first to see whether the balance of convenience lies in favo