Case: M/S Best Sellers Retail(I)P.Ltd Vs. M/S Aditya Birla Nuvo Ltd

Aditya Birla Nuvo Ltd., respondent no.1 in both the appeals, filed a suit O.S. No.1533 of 2010 against Liberty Agencies, a partnership firm and its partners, in the Court of the City Civil Judge at Bangalore. The case of the respondent no.1 in the plaint was as follows: The respondent no.1 was engaged in the business of readymade garments and accessories under various reputed brand names and in the year 1995 had appointed Liberty Agencies as an agent to conduct its business of readymade garments and accessories with the reputed brand name ‘LouisThereafter, on 02.03.2005 respondent no.1 entered into a fresh agreement with Liberty Agencies under which Liberty Agencies agreed to sell the products of the respondent no.1 in the suit schedule property and also agreed to retain the possession of the suit schedule property until the expiry of the term of agreement and Liberty Agencies was not to sell any other articles or goods other than that supplied by the respondent no.1. Under the agreement dated 02.03.2005 (for short ‘theLiberty Agencies was entitled to a fixed commission of Rs.7,50,000/- per month and by an addendum dated 01.07.2008 the fixed commission payable to Liberty Agencies was increased to Rs.9,62,500/-. Thereafter, the respondent no.1 notified to Liberty Agencies various breaches of the terms and conditions of the agreement but Liberty Agencies did not set right the breaches. As a result, the respondent no.1 suffered huge financial losses. The respondent no.1 issued a legal notice on 06.02.2010 calling upon Liberty Agencies to comply with the terms of the agreement. Liberty Agencies, however, sent a letter dated 26.02.2010 claiming that the constitution of the partnership firm has changed and that its partner A.C. Thirumalaraj had retired and that A.C. Thirumalaraj as the owner of the suit schedule property had terminated the tenancy of the suit schedule property in favour of Liberty Agencies and initiated a collusive eviction proceeding with an intention to defeat the claim of the respondent no.1. The respondent no.1 thus prayed for specific performance of the agreement and in the alternative for damages for expenses and losses amounting to Rs.20,12,44,398/- if the specific performance of the agreement was refused by the Court.4. Along with the suit, respondent no.1 also filed an application under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure (for short ‘thepraying for a temporary injunction restraining the defendants from leasing, sub-leasing, alienating or encumbering the suit schedule property in any manner pending disposal of the suit. Liberty Agencies and A.C. Thirumalaraj filed their objections to the application for temporary injunction and stated, inter alia in their objections that the possession of the suit schedule property had been delivered to Best Sellers Retail (I) Pvt. Ltd. The Additional City Civil Judge heard the parties and by order dated 24.04.2010 allowed the application for temporary injunction and restrained Liberty Agencies and its partners including A.C. Thirumalaraj from leasing, sub-leasing, alienating or encumbering the suit schedule property in any manner pending disposal of the suit.5. Aggrieved, A.C. Thirumalaraj filed a Miscellaneous Appeal under Order 43 Rule 1 of the CPC against the order of temporary injunction before the High Court. While the Miscellaneous Appeal was pending, it was brought to the notice of the High Court in I.A. No.1 of 2010 that in spite of the temporary injunction granted in favour of the respondent no.1, A.C. Thirumalaraj and Best Sellers Retail (I) Pvt. Ltd., were opening a shop in the suit schedule property in the name of ‘Jack &and by an order dated 16.07.2010 the High Court restrained Best Sellers (I) Pvt. Ltd. from carrying on business in the suit schedule property until further orders of the High Court. Best Sellers Retail (I) Pvt. Ltd. then filed an application M.C. No.12036 of 2010 for vacating the interim order dated 16.07.2010. By the impugned judgment, however, the High Court dismissed the Miscellaneous Appeal and rejected the appeal for vacating the interim order but directed the respondent no.1 to give an undertaking to the trial court that in case respondent no.1 fails in the suit, it will compensate the loss to A.C. Thirumalaraj and Best Sellers Retail (I) Pvt. Ltd. for not using the suit schedule property. Aggrieved, A.C. Thirumalaraj and Best Sellers (I) Pvt. Ltd. have filed these Civil Appeals.

Court's reasoning:
17. Despite this claim towards damages made by the respondent no.1 in the plaint, the trial court has held that if the temporary injunction as sought for is not granted, Liberty Agencies may lease or sub-lease the suit schedule property or create third party interest over the same and in such an event, there will be multiplicity of proceedings and thereby the respondent no.1 will be put to hardship and mental agony, which cannot be compensated in terms of money. Respondent no.1 is a limited company carrying on the business of readymade garments and we fail to appreciate what mental agony and hardship it will suffer except financial losses. The High Court has similarly held in the impugned judgment that if the premises is let out, the respondent no.1 will be put to hardship and the relief claimed would be frustrated and, therefore, it is proper to grant injunction and the trial court has rightly granted injunction restraining the partners of Liberty Agencies from alienating, leasing, sub-leasing or encumbering the property till the disposal of the suit. The High Court lost sight of the fact that if the temporary injunction restraining Liberty Agencies and its partners from allowing, leasing, sub-leasing or encumbering the suit schedule property was not granted, and the respondent no.1 ultimately succeeded in the suit, it would be entitled to damages claimed and proved before the court. In other words, the respondent no.1 will not suffer irreparable injury. To quote the words of Alderson, B. in The Attorney-General vs. Hallett [153 ER 1316: (1857) 16 M. &take the meaning of irreparable injury to be that which, if not prevented by injunction, cannot be afterwards compensated by any decree which the Court can pronounce in the result of the