{"id":56748,"date":"2002-07-09T00:00:00","date_gmt":"2002-07-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/hindustan-petroleum-corporation-vs-sri-sriman-narayan-anr-on-9-july-2002"},"modified":"2015-03-14T20:34:27","modified_gmt":"2015-03-14T15:04:27","slug":"hindustan-petroleum-corporation-vs-sri-sriman-narayan-anr-on-9-july-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/hindustan-petroleum-corporation-vs-sri-sriman-narayan-anr-on-9-july-2002","title":{"rendered":"Hindustan Petroleum Corporation … vs Sri Sriman Narayan & Anr on 9 July, 2002"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Hindustan Petroleum Corporation … vs Sri Sriman Narayan & Anr on 9 July, 2002<\/div>\n
Author: D.P.Mohapatra<\/div>\n
Bench: D.P.Mohapatra, Shivaraj V.Patil.<\/div>\n
           CASE NO.:\nAppeal (civil) 3661-62  of  2002\n\n\n\nPETITIONER:\nHINDUSTAN PETROLEUM CORPORATION LTD.,\n\n\tVs.\n\nRESPONDENT:\nSRI SRIMAN NARAYAN & ANR.\n\nDATE OF JUDGMENT:\t09\/07\/2002\n\nBENCH:\nD.P.MOHAPATRA, SHIVARAJ V.PATIL.\n\n\n\n\nJUDGMENT:\n<\/pre>\n
D.P.MOHAPATRA,J.\n<\/p>\n
\tLeave is granted.\n<\/p>\n
\tThese appeals, filed by the defendant M\/s.Hindustan
\nPetroleum Corporation Ltd., are directed against the order
\nof a single Judge of the High Court of Andhra Pradesh
\nallowing the appeal filed under Order 43 Rule 1(r) Civil
\nProcedure Code (for short ‘C.P.C.’) by the plaintiff Shri
\nSriman Narayan, who is respondent herein.   The plaintiff
\nhad filed the appeals challenging the order of the Trial
\nCourt rejecting the petition filed by him under Order 39
\nRules 1 & 2 C.P.C. seeking interim injunction, restraining
\nthe defendants from  interfering with possession of the
\npetrol pump,  bearing the name and style Super Service
\nStation at Premises No.5-8-699\/8, Nampally Station Road,
\nAbids, Hyderabad and also to restrain them from
\ninterfering with running the day to day business of the
\nsaid petrol pump.  The Trial Court took note of the factual
\nposition that the plaintiff instituted the suit on 28th
\nSeptember, 2000 whereas notice of termination of
\ndealership agreement had been served on the Manager of
\nthe petitioner on 22nd September,2000 i.e. about  a week
\nprior to institution of the suit, and that there were claims
\nand counter claims between the parties about the
\npossession of the petrol pump.\tThe Trial Court also took
\nnote of the case of the petitioner that though notice of
\ntermination was served on 22nd September, 2000 the
\nattempt of the defendant to dispossess him could not
\nsucceed and the petitioner continued in possession  of the
\npetrol pump till 29th September, 2000 on which date
\nbetween 9.30 and 10.30 A.M. he was forcibly dispossessed.
\nThe trial Court also took into consideration the case of the
\ndefendant that on 22nd September, 2000 at about 3.30
\np.m. after serving the notice of termination on the Manager
\nof the plaintiff, possession of the petrol pump was taken
\nover and the premises were got vacated by the defendant;
\nthat after taking over possession of the petrol pump the
\nfirst defendant had handed over the same to the second
\ndefendant,  the Andhra Pradesh State Civil Supplies
\nCorporation.  The Trial Court considered the documents
\nmarked as Exhibits B-3 to B-6, B-8 and B-9 which prima
\nfacie show handing over of the retail outlet  at 3.30 p.m.
\nalong with the list of items handed over to the second
\ndefendant by the first defendant on 22nd September, 2000.
\nThe Manager had affixed his signatures on the originals of
\nExh.B-3 to B-6.\t The learned Trial Court on consideration
\nof the relevant materials on record accepted the case
\npleaded by the defendant that possession of the petrol
\npump was taken over from the plaintiff through his
\nManager and was handed over to the second defendant on
\n22nd September, 2000.  The further finding recorded by the
\nlearned Trial Court was that the plaintiff had failed to
\nprove that after 22nd September, 2000 he was in
\npossession and enjoyment of the petrol pump.  The Trial
\nCourt held that the plaintiff had failed to prove a strong
\nprima facie case in his favour. Considering the further
\nquestion whether in the circumstances of the case the
\nplaintiff was entitled for an equitable relief of temporary
\ninjunction, the Trial Court held that the plaintiff was only
\na licensee authorised by the first defendant to sell the
\npetroleum products manufactured by it and an order of
\ninjunction could not be passed in favour of the licensee
\nagainst the licensor.  On these findings the Trial Court
\ndeclined to grant the plaintiff’s prayer for  temporary
\ninjunction.\n<\/p>\n
The trial Court summed up its findings in the
\nfollowing words:-\n<\/p>\n
“As already noted above, the petitioner\/
\nplaintiff has no prima facie case to succeed.
\nThe balance of convenience also is not in
\nfavour of the petitioner\/plaintiff.  No
\nirreparable loss or injury also caused to the
\npetitioner\/plaintiff, even if the possession is
\nnot restored, since entitled for the
\ncompensation on proof of his case.\n<\/p>\n
\tFor foregoing discussion, I hold on the
\npoint that the petitioner\/plaintiff is not
\nentitled for temporary injunction as claimed
\nin I.A.1373\/2000 or restoration of alleged
\npossession as claimed in I.A.1497\/2000 and
\nI answer the point accordingly against the
\npetitioner\/plaintiff.\n<\/p>\n
\t.From the above principles of law laid
\ndown and in the light of the Sections 52 to
\n64, the Easement Act, relating to law of
\nlicensees, I have no hesitation in coming to a
\npositive conclusion that the petitioner\/
\nplaintiff, after service of notice of termination
\nof the agreement which was admittedly on
\n22.9.2000, is not entitled for the relief of
\ntemporary injunction, since he is nothing
\nbut a licensee.\t When the petitioner\/plaintiff
\nis not entitled for temporary injunction even
\nif he is in possession since it is unlawful, the
\nquestion of restoration as claimed in the IA
\n1497\/2000 does not arise.”\n<\/p>\n
\tThe High Court in the appeal discussed the case of
\nparties, the contentions raised on their behalf and
\nconsidered the question whether the orders passed by the
\nCourts below are sustainable in law.  The High Court
\nobserved that in the instant case show cause notice was
\nissued on the ground that the Corporation was obliged to
\nadhere to the principles of natural justice to the effect that
\nsuch a provision is made in the agreement between the
\nparties.   The High Court appears to have taken note of the
\nfact that there was cancellation of the dissolutions of the
\npartnership firm of the plaintiff with effect from 1.3.2000
\nand that was intimated to the defendant on 3.3.2000.
\nWhen such a dissolution had taken place before the issue
\nof show cause notice  the Corporation was not entitled to
\ntake recourse to the stipulations in the agreement
\nforbidding the grantee from making any change in the
\nstructure of the firm without prior permission of the
\nCorporation.  Construing different clauses of the
\nagreement including clauses 44, 45,  55 and 57, the High
\nCourt took the view that all illegalities or misconduct or
\nviolation need not ipso facto result in inevitable
\ntermination of the agreement; for this purpose the
\nCorporation had been vested with the power to call upon
\nthe dealer to rectify the mistake and in spite of such
\ndirection, if the dealer does not rectify the mistake, it
\nwould be  open to the Corporation to terminate the
\nagreement.  Such procedure having not been followed by
\nthe defendant in the case the High Court held that the
\ntermination of the dealership agreement was prima facie
\nillegal.  Considering the factual position regarding
\npossession of the property the High Court took the view
\nthat on the date of filing of the suit the plaintiff was in
\npossession of the property.  The High Court also took the
\nview that by taking recourse to the extreme step of
\ntermination of the agreement without affording an
\nopportunity to rectify the defect by the plaintiff, serious
\nprejudice leading to irreparable injury has been caused to
\nthe plaintiff.\tOn these findings, the High Court felt
\nsatisfied that the orders refusing to grant interim
\ninjunction and\trejecting the prayer for restoration of
\npossession of the property were unsustainable in law.
\nAccordingly, the orders passed by the trial Court were set
\naside and the interlocutory applications, in I.A.Nos.1373
\nand 1497 of 2000, were allowed as prayed for. It was
\ndirected that the orders were to remain in operation
\npending disposal of the suit.  The lower Court was directed
\nto proceed with the trial of the suit expeditiously.  The said
\norder of the High Court is under challenge in the present
\nappeals.\n<\/p>\n
Shri M.L.Verma, learned senior advocate appearing
\nfor the appellant contended that the order passed by the
\nHigh Court is vitiated on account of non-consideration of
\nthe relevant criteria and well settled principles in  matters
\nof grant of interim injunction.\t Shri Verma further
\ncontended that the High Court has not considered the
\nreasons given by the Trial Court in the order declining to
\naccept the respondent no.1’s prayer for interim injunction.\n<\/p>\n
\tPer contra Shri R.F.Nariman, learned senior counsel
\nappearing for the respondent no.1 submitted that in the
\ncontext of the facts and circumstances of the case as
\nstated in the impugned order,  the High Court rightly
\ngranted the prayer for interim injunction.  According to the
\nlearned senior counsel the order is based on relevant
\nconsiderations.\t He urged that this Court may not interfere
\nwith the impugned  order.\n<\/p>\n
\tIt is elementary that grant of an interlocutory
\ninjunction during the pendency of the legal proceeding is a
\nmatter requiring the exercise of discretion of the Court.
\nWhile exercising the discretion the Court normally applies
\nthe following tests :-\n<\/p>\n
i)\twhether the plaintiff has a prima facie
\ncase;\n<\/p>\n
ii)\twhether the balance of convenience is in
\nfavour of the plaintiff; and\n<\/p>\n
iii)\twhether the plaintiff would suffer an
\nirreparable injury if his prayer for
\ninterlocutory injunction is disallowed.\n<\/p>\n
The decision whether or not to grant an interlocutory
\ninjunction has to be taken at a time when the exercise of
\nthe legal right asserted by the plaintiff and its alleged
\nviolation are both contested and remain uncertain till they
\nare established on evidence at the trial.  The relief by way
\nof interlocutory injunction is granted to mitigate the risk of
\ninjustice to the plaintiff during the period before which
\nthat uncertainty could be resolved. The object of the
\ninterlocutory injunction is to protect the plaintiff against
\ninjury by violation of his right for which he could not be
\nadequately compensated in damages recoverable in the
\naction if the  uncertainty were resolved in his favour at the
\ntrial.\tThe need for such protection has, however, to be
\nweighed against the corresponding need of the defendant
\nto be protected against injury resulting from his having
\nbeen prevented\tfrom exercising his own legal rights for
\nwhich he could not be adequately compensated.  The Court
\nmust weigh one need against another and determine where
\nthe “balance of convenience” lies. [See Gujarat Bottling Co.
\nLtd.& Ors. Vs. Coca Cola Co. & Ors. (1995) 5 SCC 544 at\n<\/p>\n
574.]<\/p>\n
In Dorab Cawasji Warden Vs. Coomi Sorab Warden &
\nOrs., (1990) 2 SCC 117, this Court, discussing the
\nprinciples to be kept in mind in considering the prayer for
\ninterlocutory mandatory injunction observed :\n<\/p>\n
“The relief of interlocutory mandatory
\ninjunctions are thus granted generally to
\npreserve or restore the status quo of the
\nlast non-contested status which
\npreceded the pending controversy until
\nthe final hearing when full relief may be
\ngranted or to compel the undoing of
\nthose acts that have been illegally done
\nor the restoration of that which was
\nwrongfully taken from the party
\ncomplaining.  But since the granting of
\nsuch an injunction to a party who fails
\nor would fail to establish his right at the
\ntrial may cause great injustice or
\nirreparable harm to the party against
\nwhom it was granted or alternatively not
\ngranting of it to a party who succeeds or
\nwould succeed may equally cause great
\ninjustice or irreparable harm, courts
\nhave evolved certain guidelines.\n<\/p>\n
Generally stated these guidelines are :\n<\/p>\n
(1)\tThe plaintiff has a strong
\ncase for trial.\t That is, it
\nshall be of a higher standard
\nthan a prima facie case that
\nis normally required for a
\nprohibitory injunction.\n<\/p>\n
(2)\tIt is necessary to prevent
\nirreparable or serious injury
\nwhich normally cannot be
\ncompensated in terms of
\nmoney.\n<\/p>\n
(3)\tThe balance of convenience
\nis in favour of the one
\nseeking such relief.\n<\/p>\n
Being essentially an equitable relief the
\ngrant or refusal of an interlocutory
\nmandatory injunction shall ultimately
\nrest in the sound judicial discretion of
\nthe court to be exercised in the light of
\nthe facts and circumstances in each
\ncase.  Though the above guidelines are
\nneither exhaustive nor complete or
\nabsolute rules, and there may be
\nexceptional circumstances needing
\naction, applying them as a prerequisite
\nfor the grant or refusal of such
\ninjunctions would be a sound exercise
\nof a judicial discretion.”\n<\/p>\n
\tIn the case of Indian Oil Corporation Ltd. vs.
\nAmritsar Gas Service & Ors.,<\/a> (1991) 1 SCC 533, a bench of
\nthree learned Judges of this Court considered the
\nappropriate relief to be granted in a case arising from
\nrevocation of the distributorship agreement for sale of LPG
\nby the Indian Oil Corporation under different clauses of
\nthe agreement.\tIn that connection, this Court made the
\nfollowing observations :-\n<\/p>\n
  “The question now is of the relief
\nwhich could be granted by the
\narbitrator on its finding that
\ntermination of the distributorship was
\nnot validly made under clause 27 of the
\nagreement.  No doubt, the notice of
\ntermination of distributorship dated
\nMarch 11, 1983 specified the several
\nacts of the distributor on which the
\ntermination was based and there were
\ncomplaints to that effect made against
\nthe distributor which had the effect of
\nprejudicing the reputation of the
\nappellant-Corporation; and such acts
\nwould permit exercise of the right of
\ntermination of distributorship under
\nclause 27.  However, the arbitrator
\nhaving held that clause 27 was not
\navailable to the appellant-Corporation,
\nthe question of grant of relief on that
\nfinding has to proceed on that basis.\n<\/p>\n
In such a situation, the agreement
\nbeing revocable by either party in
\naccordance with clause 28 by giving 30
\ndays’ notice, the only relief which could
\nbe granted was the award of
\ncompensation for the period of notice,
\nthat is, 30 days.  The plaintiff-\n<\/p>\n
respondent 1 is, therefore, entitled to
\ncompensation being the loss of
\nearnings for the notice period of 30
\ndays instead of restoration of the
\ndistributorship.  The award has,
\ntherefore, to be modified accordingly.
\nThe compensation for 30 days notice
\nperiod from March 11, 1983 is to be
\ncalculated on the basis of earnings
\nduring that period disclosed from the
\nrecords of the Indian Oil Corporation
\nLtd.”\n<\/p>\n
Coming to the case on hand it is to be kept in mind
\nthat the controversy raised in the case relates to a
\ncommercial contract entered between the appellant and
\nrespondent no.1 for sale of petroleum products
\nmanufactured by the appellant Corporation.  Permission
\nfor sale of such products was granted by the appellant on
\nthe terms and conditions set out in the agreement.  In the
\nsaid agreement it was clearly stipulated that the
\nrespondent no.1 shall not change the structure of the firm
\nwithout the permission of the appellant.  Concededly the
\nrespondent no.1 had changed the structure of the firm
\nfrom a proprietary firm to a partnership firm.\tThe
\nconsequence of violation of any condition of the agreement
\nby the respondent no.1 was provided under clause 45 in
\nwhich it was stated that the grantor\/licensor will be
\nentitled to revoke the agreement on the happening of such
\nevent.\tTherefore, prima facie the appellant was entitled to
\ntake action for revoking the agreement entered with the
\nrespondent no.1.  Validity or otherwise of the order of
\nrevocation can be considered at the stage of interim
\ninjunction only for the limited purpose of ascertaining
\nwhether there is prima facie case in favour of the
\nplaintiff\/petitioner and not for determination of the
\nquestion finally.   From the discussions in the impugned
\norder it appears that the High Court has dealt with the
\nmatter as if it was deciding the suit.\n<\/p>\n
The questions whether, if the respondent no.1 had
\nviolated the condition stipulated in the agreement by
\nchanging the structure of the firm without taking prior
\npermission from the appellant, still the latter was bound to
\ngive to the former an opportunity for rectifying the defect;
\nand  whether passing the order\trevoking the agreement
\nwithout affording such opportunity will render the
\nrevocation order invalid, are matters which are to be
\nconsidered when the suit is taken up for hearing.  These
\nare not matters to be considered in detail for considering
\nthe prayer for interlocutory order of injunction.  Regarding
\nthe question of status quo on the date of the order of
\ninjunction there was serious dispute whether the appellant
\nhad taken over possession of the property after notice of
\nrevocation of the agreement was served on the manager of
\nrespondent no.1 and had made over possession of the suit
\nproperty to respondent no.2 for the purpose of running the
\npetrol pump.  The High Court has tried to get over this
\nquestion by recording a finding that there were some
\nmaterials on record to show that the respondent no.1 was
\ntransacting  business of sale of petroleum products on the
\ndate of filing of the suit.  This finding has been arrived at
\nby the High Court without considering the reasons given
\nby the Trial Court which had recorded a finding to the
\ncontrary in its order.\tThe High Court has not at all
\ndiscussed the considerations which weighed and the
\nreasons which persuaded the Trial Court in rejecting the
\nprayer for interim mandatory injunction as prayed for by
\nrespondent no.1.  Most importantly, the High Court has
\nnot considered the question whether on the facts and
\ncircumstances of the case, if  the prayer for interim
\ninjunction is refused the plaintiff\/petitioner will suffer
\nirreparable loss which cannot be adequately compensated
\nby damages.  As has been held by this Court in Dorab
\nCawasji Warden case (supra), ordinarily the relief  to be
\ngranted to a plaintiff in such a matter is awarding of
\ndamages and interim injunction of a mandatory nature is
\nnot to be granted.\n<\/p>\n
On consideration of the entire matter, we are
\nsatisfied that the order passed by the High Court granting
\nthe prayer for interim injunction, in the context of facts
\nand circumstances of the case, is unsustainable.
\nAccordingly, the appeals are allowed. The order dated
\n5.12.2000 of the High Court in CMA Nos.3251 and 3255 of
\n2000 is set aside and the order passed by the Trial Court
\nin I.A.No.1373 & 1497\/2000 in O.S. No.1139 of 2000
\ndated 06.11.2000 is restored. It is made clear that the
\nobservations made in this judgment will not in any way
\naffect the merit of the case.  In the facts and circumstances
\nof the case, there will be no orders for costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Hindustan Petroleum Corporation … vs Sri Sriman Narayan & Anr on 9 July, 2002 Author: D.P.Mohapatra Bench: D.P.Mohapatra, Shivaraj V.Patil. CASE NO.: Appeal (civil) 3661-62 of 2002 PETITIONER: HINDUSTAN PETROLEUM CORPORATION LTD., Vs. RESPONDENT: SRI SRIMAN NARAYAN & ANR. DATE OF JUDGMENT: 09\/07\/2002 BENCH: D.P.MOHAPATRA, SHIVARAJ V.PATIL. JUDGMENT: D.P.MOHAPATRA,J. Leave is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-56748","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nHindustan Petroleum Corporation ... vs Sri Sriman Narayan & Anr on 9 July, 2002 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/hindustan-petroleum-corporation-vs-sri-sriman-narayan-anr-on-9-july-2002\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hindustan Petroleum Corporation ... vs Sri Sriman Narayan & Anr on 9 July, 2002 - 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