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2020 (5) TMI 712 - HC - Indian LawsSeeking permanent injunction, to restrain the defendant from attempting to procure and/or attempting to induce a breach/termination of any agreement/arrangement between the third parties and the plaintiff in respect of non-functional properties of the plaintiff across India - restraint on defendant from entering into any agreement or arrangement with any third party in relation to any right/interest of the defendant with respect to non-functional properties across India, where agreement/arrangement for grant of property rights to the plaintiff has been executed but multiplex operations have not commenced - recovery of nominal damages - HELD THAT - No merit is found in the contention of the senior counsel for the plaintiff, of the defendant being bound by any admission contained in the order dated 1st February, 2018 and admission of law does not bind any party to a lis less a counsel. Rather it appears that the suit as framed, is directed not only against the defendant but also against others who have not been impleaded. During the hearing it emerged that besides the plaintiff and the defendant there are only one or two others carrying on same business but on a much smaller scale than the plaintiff and the defendant. The effect of granting injunction as sought against the defendant, would be that the defendant even if has entered into agreements with the developer/owner of the Amritsar and Juhu, Mumbai properties, would be unable to proceed under the said agreements, leaving the developer/owner aforesaid in a lurch with respect to their properties meant for running and operating multiplex cinemas and who will have no option but to accept whatever commercial terms the plaintiff offers. The claim of the plaintiff herein also is, to monopolize land and buildings thereon, across India, and just like agricultural produce was held to be natural resource, so is land a natural resource. Moreover yet another directive principle is, that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment and the monopoly sought to be created by the plaintiff by seeking the injunction in this suit, to exclude the defendant from its forays to procure real estate for its business across India, would be against the said directive principle of State Policy - I reiterate that the grant of injunction claimed by the plaintiff on the premise of the actions of the defendant comprising a tortious act of interference with contractual relations of the plaintiff, would be in violation of the fundamental right of the defendant, its promoters and directors to carry on trade and business, without any law having been enacted by the State in this respect in the interest of general public, within the meaning of Article 19(5) of the Constitution of India. The plaintiff, on the averments contained in the plaint, had no cause of action for the relief claimed against the defendant and the relief claimed by the plaintiff against the defendant is barred by law - the suit is dismissed.
Issues Involved:
1. Permanent injunction to restrain the defendant from inducing breach/termination of agreements. 2. Permanent injunction to restrain the defendant from entering agreements with third parties. 3. Recovery of nominal damages. 4. Maintainability of the suit based on tortious interference with contractual relations. 5. Specific performance of agreements. 6. Non-joinder of necessary parties. 7. Applicability of Section 27 of the Indian Contract Act. 8. Public policy and competition law considerations. Detailed Analysis: 1. Permanent Injunction to Restrain the Defendant from Inducing Breach/Termination of Agreements: The plaintiff sought a permanent injunction to prevent the defendant from inducing breaches or terminations of agreements between the plaintiff and third parties concerning non-functional properties. The plaintiff alleged that the defendant, a competitor, interfered with its agreements, particularly regarding properties in Amritsar and Juhu, Mumbai. The court questioned the enforceability of such an injunction, suggesting that if the agreements were specifically enforceable, the plaintiff's remedy would be to seek specific performance against the other party to the agreement. If not, neither the defendant nor the other party's right to enter into agreements could be curtailed merely by the plaintiff's entering into agreements. 2. Permanent Injunction to Restrain the Defendant from Entering Agreements with Third Parties: The plaintiff also sought to prevent the defendant from entering into any agreements with third parties concerning properties where the plaintiff had executed agreements but had not commenced operations. The court highlighted that competition could not be curtailed merely by the plaintiff's agreements and that the remedy lay in specific performance if the agreements were enforceable. 3. Recovery of Nominal Damages: The plaintiff claimed nominal damages of ?2,25,00,000/-. The court noted that if the plaintiff had no enforceable right, the question of recovering damages would not arise. The court also pointed out that the plaintiff had accepted the refund of the security deposit for the Amritsar property without any demur, indicating acceptance of the termination of the agreement. 4. Maintainability of the Suit Based on Tortious Interference with Contractual Relations: The court examined the plaintiff's claim of tortious interference, referencing various judgments. It noted that while inducement to breach a contract is recognized as a tort, the plaintiff's case involved seeking an injunction against a third party (the defendant) rather than the party to the agreement. The court found that the plaintiff's reliance on tortious interference was not sufficient to maintain the suit, especially when the agreements in question were not specifically enforceable or binding. 5. Specific Performance of Agreements: The court emphasized that the plaintiff's remedy, if it had binding agreements, lay in seeking specific performance against the developer/owner of the properties. The court noted that specific performance could be claimed not only against the agreement seller/lessor but also against any other person claiming under them by a title arising subsequently to the contract. 6. Non-joinder of Necessary Parties: The court highlighted the absence of the developer/owner of the properties in the suit, making it impossible to determine whether the plaintiff had binding agreements or whether the developer/owner was in breach. The court stated that these parties were necessary for adjudication, and the plaintiff's failure to implead them warranted dismissal of the suit. 7. Applicability of Section 27 of the Indian Contract Act: The court discussed the relevance of Section 27, which makes agreements in restraint of trade void. It held that the plaintiff could not seek to enforce a restraint on the defendant's trade through tortious interference claims, as this would contradict the public policy embodied in Section 27. 8. Public Policy and Competition Law Considerations: The court noted that granting the injunction sought by the plaintiff would violate public policy by stifling competition and creating a monopoly. It emphasized that the law entitles the plaintiff to specific performance or damages but not to expand its remedies to restrain competition. The court also pointed out that the relief sought would prejudice property owners by limiting their options to deal with their properties. Conclusion: The court dismissed the suit, finding that the plaintiff had no cause of action for the relief claimed against the defendant and that the relief sought was barred by law. The plaintiff was also ordered to pay costs of ?5,00,000/- to the defendant.
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