An oral agreement is not enforceable if the parties contemplated the execution of a formal document. An injunction cannot be granted to prevent a breach of contract where monetary compensation is an adequate relief.

K.C. Agarwal, J.

This is an appeal by the Appellant, M/s. Himalaya Transport and Forwarding Agency, Haldwani, from the judgment and decree of the learned Civil Judge, Naini Tal, dismissing the suit filed by the Appellant for injunction restraining the Defendant M/s. Almora Magnestite limited from inviting tenders and from entering into any other agreement for the transportation of goods from Haldwani to Nainital.

2. The Plaintiff was a firm registered under the Partnership Act. The said firm was primarily engaged in the transportation of goods from the rail heads at Haldwani. Ramnagar and Tanakpur for carrying goods to various places inside Kumaon, Garhwal, Uttar Kashi and Chamoli or back. The Defendant, which had its office at Almora, was engaged in the production of dead burnt megnestite. For the purpose of transportation of goods for use in construction of buildings as well as dead burnt megnestite, they intended to engage transporters for carrying goods containing materials for constructions from Haldwani to the Factory site. Accordingly, talks with regard to the terms and conditions for transportation of goods to the factory site started between the Plaintiff and the Defendant. At a meeting convened for the said purpose on 3rd October, 1972, the Plaintiff and the Defendant agreed that the Plaintiff would be given the work of transportation. On 15th March, 1973, the Defendant issued a letter of intent for transport of dead burnt magnestite, loose or packed in bags, by means of motor trucks from the plant site at Kafligarh to its depot at Kathgodam. In this letter the various terms and conditions were also mentioned. On receipt of the aforesaid intent, the Plaintiff returned the same to the Defendant with the signature of the person authorised to do so on behalf of the Plaintiff. This was done as token of acceptance of the offer made by the Defendant. The Plaintiff, thereafter, continued to transport the goods on the basis of the letter of intent. The Plaintiff, however, subsequently learnt that the Defendant had invited tenders for transportation of all kinds of goods, including transport of materials for which the Plaintiff had been engaged by the Defendant, and, therefore, the Plaintiff had no alternative but to file the present suit for the relief of injunction restraining the Defendants from inviting tenders or entering into any other agreement for the transportation of goods for which the Plaintiff had been engaged earlier.

3. The suit was contested by the Defendant on the grounds, inter alia, that the Plaintiff and the Defendant did not enter into any concluded contract and, therefore, the Plaintiff was not entitled to any relief claimed in the present suit, and that the suit of the Plaintiff was barred by Section 41(e) read with Section 14(1) Clauses (a), (b) and (d) of the Specific Relief Act.

4. The trial court dismissed the suit. Aggrieved by the judgment of the trial court, the Plaintiff has filed the present appeal.

5. The first question raised by the learned Counsel for the Plaintiff before us was that the court below committed an error in holding that the Defendant had not entered into a concluded contract with the Plaintiff under which the Plaintiff had acquired a right to transport goods of the Defendant from Haldwani to its factory site. The submission of the learned Counsel was that as the evidence brought by the Plaintiff established that the parties had settled by orally agreeing to give the right of transportation to the Defendant, the court below was wrong in dismissing the suit of the Plaintiff merely because a formal agreement was not drawn up. The submission made by the learned Counsel for the Plaintiff was controverted by the learned Advocate General appearing for the Defendant. He contended that the parties contemplated the execution of a formal document and, therefore, until such a document was executed the Plaintiff did not acquire any right to file the suit for the relief claimed therein.