JUDGMENT
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 first party having contracted to sell the machineries to the plaintiff had no right to resile from the said contract or to transfer the same to the appellant or to anyone else, and the plaintiff is entitled to have the said contract done by the defendants first party.
4. The plaintiff also prayed for an injunction restraining the defendants first party from transferring or otherwise dealing with the machineries during the pendency of the suit, and the learned Subordinate Judge by an order dated 19th September, 1960, granted the injunction prayed for. It is against that order that defendant No. 6 has preferred this appeal. He traverses all the allegations of the plaintiff and denies that the contract was made by him on behalf of the plaintiff. He denies that he is a personal assistant of Kishunchand. His case is that he negotiated for and concluded a contract on behalf of Arun Spinning Mills, paid the price and obtained delivery of the machineries.
5. The learned Subordinate Judge found that the plaintiff had a prima facie case, and the balance of convenience was also in its favour.
6. Mr. Premlal appearing for the appellant strenuously contested the finding of the learned Subordinate Judge that the plaintiff had a prima facie case. He pointed out that the contract was in fact entered into by the appellant, that the appellant paid Rs. 30,000 and obtained delivery of possession of the properties. There was no contract whatsoever between the plaintiff and the defendants first party. These circumstances, he submitted, show that the plaintiff had prima facie no case, and it cannot succeed in this suit unless it establishes by cogent evidence that the appellant was a man of no means, that he was a mere personal assistant of Kishunchand, that there was a collusion between the appellant and the defendants first party, and that the defendants first party fraudulently transferred the machineries to the appellant. He pointed out that on all these points there was no evidence so far.
He further urged that when admittedly the consideration of the sale was Rs. 30,000, there was absolutely no reason for the defendants first party to prefer the appellant to the plaintiff, when in fact the contract was entered into with the plaintiff and not with the appellant. It is not a case where by repudiating the contract with the plaintiff, the defendants first party obtained higher price. He further urged that the plaintiff might have started the negotiation, but eventually the negotiation was inconclusive and the contract was finally made with the appellant. These contentions, in my opinion, have considerable force. But, I advisedly desist from expressing any concluded opinion on this part of the argument of learned counsel. For the purpose of this appeal, I would assume that the plaintiff had a prima facie case.
But the circumstance that the plaintiff has a
prima facie case does not necessarily mean that an order of injunction must follow. The Court must also consider on which side lies the balance of convenience. In the case of Brajendra Nath v. Kashibai, AIR 1946 Pat 177, their Lordships have laid down that in order to obtain an interlocutory injunction it is not enough for the plaintiff to show that he has a prima facie case. He must further show that (1) he will suffer an irreparable injury if the relief of temporary injunction is not granted.
(2) in the event of his success he will not have the proper remedy in being awarded adequate damages;
(3) the balance of convenience is in his favour, or, in other words, his inconvenience will in all events exceed that of the defendant in case he is restrained; and (4) lastly, he must show a clear necessity for affording immediate protection to his alleged right or interest which would otherwise be seriously injured or impaired. Their Lordships have further laid down that temporary injunction can only be granted where award of compensation and damages will not be a full and complete remedy to the person applying for the same.
This case was followed by another Bench of this Court in Kalyanpur Lime Works v. State of Bihar, AIR 1951 Pat 226. Their Lordships have pointed out in this case that the fact that a prima facie case has been made out by showing that there is a fair question for trial, does not necessarily mean that a temporary injunction must follow restraining the contracting defendant from dealing with the property, and whether an order o£ injunction should or should not issue will depend on the facts of the case, and the Court must also consider the questions of irreparable or serious injury and balance of convenience.
Again, in the case of Keneth Arthur Hill v. Ranjan Bardhan, AIR 1924 Pat 526, a Bench of this Court refused injunction because in that case damage could be recovered from the defendant who had spent a large sum of money which would have been wasted if the injunction had been granted. It is to be seen, therefore, whether the balance of convenience is on the side of the plaintiff or on the side of the defendant.
7. The hard fact is that the appellant has paid Rs. 30,000 to the defendants first party. The machineries are required for running Arun Spinning Mills, one of the partners of which is the appellant. The partnership has already been executed. After having paid Rs. 30,000 in hard cash, the appellant will be put to extreme loss if the machineries are not immediately utilised. They are bound to deteriorate if they are allowed to remain unused for a long time. The plaintiff has not up till now spent a single farthing over these machineries. It is said that it had paid RS. 2,000 to the defendant as earnest money.
But, as rightly observed by the learned Subordinate Judge, there is no evidence to support this payment. Thus, on one side we have the plaintiff which has not incurred any expenditure so far; on the other side we have the appellant who has paid Rs. 30.000 in cash for the machineries. In the event of the failure of the plaintiff, the appellant will be put to extreme loss, because by the time the suit is finally decided, the machineries will depreciate and may be a mere scrap for non-user.
Apart from this, the appellant has given an undertaking on his behalf and on behalf of the partnership that he shall not sell or encumber or in any way dispose of the disputed machineries during the pendency of the suit and shall not remove the machineries from Amritsar until the disposal of the suit. He has further given an undertaking that in the event of the plaintiff’s success he would hand over the disputed machineries to it at Amritsar on receipt of Rs. 30,000 from it
He has further stated that he would furnish a bank guarantee for Rs. 30,000 in favour of the court below for fulfilment of the undertaking aforesaid. All these circumstances show unmistakably that the balance of convenience is in favour of the appellant rather than in favour of the plaintiff. It is true that after the close of the case, Kishunchand on behalf of the plaintiff expressed readiness to furnish a cash security to the tune of Rs. 40,000. I do not think, this circumstance can at all be taken into consideration at this stage for the simple reason that apart from the bank guarantee, which the appellant has undertaken to furnish he has paid Rs. 30,000 to the defendants.
It was further pointed out by learned counsel for the plaintiff that the machineries are rare ones and are not readily available in India. It is, however, not stated that these machineries are not at all available. They cannot be readily available in India, but they may be got from abroad. It is not understandable how the plaintiff will gain if the machineries are kept idle at Bhagalpur. The plaintiff does not want possession of the machineries for running its mill immediately. If it can wait without the machineries until the disposal of this suit, which will undoubtedly take some years, it can, I think, get without much difficulty similar machineries from foreign countries within that period.
Having carefully considered these circumstances, I think that the balance of convenience is in favour of the appellant. If the injunction were granted, then a large sum of money, namely, Rs. 30,000, will be simply wasted, and there will be irreparable injury to the appellant.
8. Apart from this, specific performance of an agreement cannot be enforced unless pecuniary compensation would not be an adequate remedy. Sections 12 and 21 of the Specific Relief Act preclude a decree for specific performance where pecuniary compensation would be an adequate remedy. Section 12 lays down as follows:
“12. Except as otherwise provided in this chapter, the specific performance of any contract may in the discretion of the Court be enforced … (c) When the act agreed to be done is such that pecuniary compensation for its non-performance would not afford adequate relief; or (d) when it is probable that pecuniary compensation cannot be
got for the non-performance of the act agreed to be done.
Explanation — Unless and until the contrary is proved, the Court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money, and that the breach of a contract to transfer movable property can be thus relieved”.
The machineries are movable properties. Under the Explanation to Section 12 it is to be presumed that the compensation would be an adequate remedy. The materials on the record do not show that monetary compensation will not be sufficient. All that has been said is that the machineries are not easily available in India, which as already observed above, is not sustainable on the evidence on the record. In my opinion, compensation seems to be an adequate remedy. If there is an adequate remedy, then the contract cannot be specifically enforced. Under Section 21 (a) of the. Specific Relief Act, a contract for the non-performance of which compensation in money is an adequate relief cannot be specifically enforced.
If any authority is needed, I would refer to a decision of their Lordships of the Judicial Committee in Ramji v. Rao Kishore Singh, 56 Ind App 280 : (AIR 1929 PC 190). Thus, prima facie, Sections 12 and 21 of the Specific Relief Act stand in the way of the plaintiff. I must not be understood to have expressed any concluded opinion on this question. I have considered it on the basis of the materials so far available. The materials do not establish that monetary compensation will not be adequate. It will not, however, debar the plaintiff from establishing in the Court below that the machineries are rare machineries and cannot be had easily from foreign countries and that monetary compensation will not be an adequate relief and the injury caused to it will be irreparable. If it establishes these facts, Sections 12 and 21 may not bar a decree for specific performance of the agreement. What I mean to say is that the materials placed by the plaintiff before the Court do not prima facie establish that pecuniary compensation will not be an adequate relief for the plaintiff. From this point of view also, an injunction is not called for.
9. In the result, this appeal is allowed with costs throughout and the order of the learned Subordinate Judge dated 19th September, 1960, is set aside. This order, however, is subject to the undertaking given by the appellant in this Court and further on the condition that prior to the removal of the machineries from Bhagalpur to Amritsar he would furnish a bank guarantee of Rs. 30,000 in favour of the Court below.
Ramaswami, C. J.
10. I agree.