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High Court Of Delhi
RAMAN HOSIERY FACTORY DELHI - Appellant
Versus
J.K.SYNTHETICS LIMITED - Respondent
Suit 559 of 1973
Decided On : 01/09/1974
MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969 - SECTION 33, 35, 37, 38, 48 - SPECIFIC RELIEF ACT, 1963 - SECTION 38, 41 - CODE OF CIVIL PROCEDURE, 1908 - ORDER 39, RULES 1, 2, 4 - INJUNCTION - TEMPORARY INJUNCTION - RESTRAINT OF TRADE - PUBLIC INTEREST - BALANCE OF CONVENIENCE - IRREPARABLE INJURY - NYLON YARN INDUSTRY - SEPTEMBER AGREEMENT.
Fact of the Case:
Plaintiffs, manufacturers of nylon hosiery goods, filed a suit seeking a declaration that the September Agreement entered into by defendants, manufacturers of nylon yarn, was void and/or illegal, and an injunction restraining the defendants from distributing nylon yarn under the said agreement. The plaintiffs alleged that the agreement aimed at ousting crimpers, who processed nylon yarn for the hosiery industry, and in turn cripple the hosiery industry by depriving them of their raw material. The defendants resisted the grant of a temporary injunction.
Finding of the Court:
The court held that the plaintiffs had not made out a prima facie case for the grant of a temporary injunction. The court found that the September Agreement was not unlawful as it had not been declared void by the Commission under the Monopolies and Restrictive Trade Practices Act, 1969. The court also found that the plaintiffs had not suffered any irreparable injury and that the balance of convenience was in favor of the defendants.
Issues: 1. Whether the September Agreement was void and/or illegal under the Monopolies and Restrictive Trade Practices Act, 1969? 2. Whether the plaintiffs had made out a prima facie case for the grant of a temporary injunction? 3. Whether the plaintiffs had suffered any irreparable injury? 4. Whether the balance of convenience was in favor of the plaintiffs or the defendants?
Ratio Decidendi: 1. The court held that the September Agreement was not unlawful as it had not been declared void by the Commission under the Monopolies and Restrictive Trade Practices Act, 1969. The court found that the agreement was not against public policy and did not violate any provision of law. 2. The court held that the plaintiffs had not made out a prima facie case for the grant of a temporary injunction. The court found that the plaintiffs had not shown that they had suffered any irreparable injury and that the balance of convenience was in favor of the defendants. 3. The court held that the plaintiffs had not suffered any irreparable injury. The court found that the plaintiffs could be compensated in money for any loss that they may have sustained. 4. The court held that the balance of convenience was in favor of the defendants. The court found that the defendants were dealing with a large number of people and that the trade of the defendants could not be jeopardized just to meet the possibility of the plaintiffs not getting supplies of raw material.
Final Decision: The court dismissed the plaintiffs' application for a temporary injunction.
( 1 ) THE plaintiffs are the three partners and their partnership firm who claim that they are carrying on the business of manufacture and sale of nylon hosiery goods in Delhi. Defendants 1 to 4 are manufacturers of various types of nylon filament yarn, including nylon-6 multi-filament yarn and supply about 90 per cent. of the total nylon yarn produced in India. Defendants 1 to 4 also manufacture nylon crimped/dyed yarn. Defendant 5 is an Association of synthetic fibre industry, Bombay of which defendants 1 to 4 are members. Defendants 6 to 23 are various associations/co-operative Societies, who represent some of the actual users of the said nylon-6 multi-filament yarn and also nylon crimped/dyed yarn. Defendant 24 is the Chairman of the Central Nylon Committee: defendant 25 is the Member- Secretary of the Central Nylon Committee and defendant 26 is the Chairman of the Silk and Rayon Textile Export Promotion Council and is also a member of the said Central Nylon Committee.
( 2 ) DEFENDANTS 1 to 4 and defendants 6 and 8 to 14 entered into an agreement dated April 22, 1972 (hereinafter referred to as "the April Agreement") whereby the selling prices of various deniers and specifications of only nylon multi-filament yarn were fixed as the ceiling prices and defendants 1 to 4 agreed to maintain the pattern of their production to be able to meet the requirements of the Actual Users Industry from time to time. On September 9. 1973, defendants 1 to 4 and 6 to 23 entered into another agreement (hereinafter referred to as "the September Agreement") superseding the April Agreement. This agreement purports to have been entered into to avoid hardship, to evolve a voluntary system of production, a suitable voluntary system of pricing, a suitable system of equitable distribution to Actual Users and to foster a spirit of co-operation between the parties. A central Review Committee was set up under this agreement to consider problems of distribution of nylon yarn manufactured by defendants 1 to 4. The plaintiffs do not claim to be parties to either the April Agreement or the September Agreement. They, however, felt aggrieved by the aforesaid defendants entering into the September Agreement. In consequence, the plaintiffs filed the present suit praying that the September Agreement be declared to be void and/or illegal; that the defendants, their agents and servants be restrained by a perpetual injunction from, in any manner, directly or indirectly distributing nylon multi filament yarn and/or nylon crimped and/or nylon crimped/dyed yarn under the said Agreement dated September 9. 1973; and the said Agreement be ordered to delivered up and be cancelled. Along with the suit the plaintiffs moved an application under Order 39, Rules 1 and 2 read with Section 151 of the Code of Civil Procedure praying that pending the disposal of the suit a temporary injunction restraining the defandants, their agents or servants from, in any manner directly or indirectly distributing nylon multi-fila-ment yarn, and/or nylon crimped and/or nylon crimped/dyed yarn under the Agreement dated September 9. 1973. entered into between defendants 1 to 4. and defendants 6 to 23. An ex parte temporary injunction in the above terms was also sought.
( 3 ) THE suit was valued for the purposes of jurisdiction at Rs. 200. 00 and was filed in the court of the Senior Sub- Judge, Delhi, on being assigned to a Subordinate Judge an ex parte interim injunction was issued in terms of the prayer in the said application. This led the All India Man Made Textiles Manufacturing Association, defendant No. 7, to move an application under Order 39 Rule 4 Civil Procedure Code for setting aside the ax parte ad interim injunction issued by the Subordinate Judge on December 1, 1973. There were other proceedings in the matter ending with the suit being transferred by this Court to its file on its Extraordinary Original Civil Jurisdiction Side. By an order dated December 24, 1973 Hon bl
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