Syed Md. Mahfooz Alam, J.
1. Since second appeal No. 168 of 1990 and second appeal No. 141 of 1990 arise out of one and the same judgment and decree dated 17.3.1990 passed by Sri Madan Mohan Verma, 2nd Additional District Judge, Begusarai in Misc. Title Appeal No. 26/1985/32/1987, as such both these second appeals are being disposed of by this common judgment passed in second appeal No. 168 of 1990. The learned 2nd Additional District Judge, Begusarai by his judgment and decree dated 17,3.1990 has been pleased to set aside the judgment and decree dated 17.9.1985 passed by Sri S.B. Choudhary, Munsif 1st, Begusarai in title suit No. 65/1980 whereby he had dismissed the suit of the plaintiff-respondents. Against the said judgment of reversal, the defendant- appellants have preferred these second appeals.
2, The plaintiff's case as per the plaint, is as follows :-
Plaintiff No. 1 Ramashish Prasad Singh, who was an unemployed graduate, was in search of a job and for that purpose he knocked the door of defendant No. 3 who was then posted at Barauni as Sales Officer of defendant No. 1 (I.B.P. Company Ltd.). Further case of the plaintiff is that defendant No. 3 representing his company furnished information that certain dealers are going to be employed by Indo Burma Petroleum Company Ltd, (defendant No. 1) for its proposed petrol pump between 15 to 16 km by the side of Begusarai Rosera High Way. He encouraged the plaintiff No. 1 that he being a local man of Manjhaul had better prospect for getting the job as he was satisfying the criteria laid down by the company for its illegibility in case the ST. or S.C. candidate or candidates from Co-operative Societies do not turn up. The defendant No. 3 called two persons from Calcutta and appointed a day for assessment of feasibility of installing petrol pump at proposed site asking the plaintiff to be present and then the three persons visited block and the proposed site for installation of petrol pump and collected relevant datas from the B.D.O. and Supply Inspector Cheria Bariarpur for successful running of the proposed petrol pump. The defendants also visited Khodawanpur and Bhgwanpur blocks and collected data from there also. On collection of data, the defendant No. 3 became fully satisfied for the successful working of petroleum pump at proposed site at Begusarai Rosera High Way. After holding aforesaid enquiry defendant No. 1 through its agents and employee i.e. defendant Nos. 2 and 3 directed the plaintiff to purchase 100/100 sq. feet of land near the proposed site and also to manufacture 2 lakhs of bricks as the same would facilitate the plaintiff for his selection as a dealer for which advertisement notice was to be issued in due course. Further case of the plaintiff is that defendant No. 1 published an advertisement in the 'Indian Nation' dated 19.4.1979 calling upon application for the dealership laying down certain criteria for selection of the candidate with minimum qualification, and financial status. The plaintiff No. 1 was one of the applicants along with defendant 2nd party and he fulfilled all the criteria besides being a man of locality deserving special preference as envisaged under the advertisement. The plaintiff No. 1 turned up for interview before the board consisting of three persons and the plaintiff fared well in the interview which can be established from the record maintained by the company. Further case of the plaintiff is that the plaintiff No. 1 in anticipation of selection as per oral assurance of defendant Nos. 2 and 3 representing the company had already complied with the criteria as laid down by the company in its advertisement and invested huge amount of money to the tune of over a lakh in part performance of the contract by purchasing land through Kebalwa dated 24.1.1979 in his name from his uncle, plaintiff No. 2, Shri Arvind Narain Agrawal who is a big business magnet of Begusarai who gave his consent to sell the land only after talking to defendant Nos. 2 and 3 on phone. Further case of the plaintiff is that some time after in interview at 2.00 pm on 19.7.1979 in Patliputra Hotel at Patna, the plaintiff No. 1 to his great dismay and surprise was informed that 'defendant No. 4 Shri S.N. Roy was selected as a dealer for the said site and defendant No. 2 was given second preference whereas plaintiff No. 1 was not selected. Further case of the plaintiff is that defendant No. 4 Shri S.N. Roy, who was selected as a dealer, wrote a letter to the defendant No. 1 that he was unable to procoure and near the proposed site as such he intended to form partnership with plaintiff No. 1 but the defendant No. 1 instead of accepting the request cancelled his name from the panel and offered dealership to the defendant No. 5. Further case of the plaintiff is that the plaintiff filed a petition by way of representation before defendant No. 1 to reconsider his case who had suffered a loss in money and energy spending tremendous amount at the advice and assurance of. the company and its men and by way of part performance of the oral contract. Further case of the plaintiff is that defendants have no valid and sound reason to reject the claim of the plaintiff and as the defendant No. 1 did not consider the representation of the plaintiff, as such the necessity of filing the suit arose.
3. Three sets of written statements had been filed on behalf of the defendants, out of which one written statement had been filed jointly on behalf of the defendant Nos. 1 and 2, another had been filed on behalf of the defendant No. 3 and the third had been filed on behalf of the defendant No. 5. The defence of the defendants was almost common with slight variations.
4. The case for the defendant Nos. 1 and 2 was that the defendant No. 1 proposed to appoint a dealer of diesel outlet at Manjhaul between 15 and 16 km on Begusarai Rosera High Way. Therefore, defendant No. 1 published an advertisement in the Indian Nation and Aryabart Newspapers on 19.4.1979 inviting applications from persons desiring to be appointed as dealers. The advertisement mentioned requirements to be fulfilled by a candidate desiring to be appointed as a dealer. Thereafter several applications were received including the applications of the plaintiff dated 24.4.1979.
5. Further case is that the defendant Nos. 1 and 2 were to be guided by the guidelines issued by the Ministry of Petroleum to all Oil Companies under Public Sector, while appointing a dealer. As per the guidelines, a selection committee was to be constituted consisting of Senior Officials of I.O.C., Patna, Bharat Petroleum Corporation, Patna besides the Divisional Manager of defendant No, 1 at Patna. Only six candidates had been selected for the interview and they had been called for interview on 19.7.1979. Out of them only three candidates appeared for the interview.
6. The plaintiffs had submitted joint application for the appointment of a dealer but in the interview only plaintiff No. 1 appeared and plaintiff No. 2 did not appear and therefore, plaintiff No. 1 was not selected for appointment as a dealer. The selection committee unanimously agreed to form a panel of dealers to be appointed in order of merit and accordingly Shri S.N. Roy was given first preference and the defendant No. 5 was given 2nd preference. Thereafter, field investigation was made and a letter was delivered to the defendant No. 4 Shri S.N. Roy offering H.S.D. dealership subject to his fulfilling the terms and conditions mentioned in the letter dated 5.1.1979. The defendant No. 4 did not fulfil the conditions and therefore, these defendants by their letter dated 26.5.1980, withdrew their offer of dealership to him.
7. The defendant No. 4 by a letter dated 31.1.1980 requested these defendants to allow him to proceed with partner but the same was not accepted because his original application was exclusively in his individual capacity.
8. The defendant No. 3 as a Sales Officer had no authority to take any interview from the intending candidates. Since no market survey had been done, as required for the purpose, the defendant No. 3 was not in a position to furnish any information nor could encourage the plaintiff No. 1 in the manner stated in para 4 of the plaint. The two persons, who had been called for from Calcutta, were trainee officers and were undergoing training since some time back under the defendant No. 3. The defendant No. 3 along with the said two officers conducted market survey at Manjhaul and its neighbourhood and collected materials required for such market survey.
9. After completing the Market Survey they submitted their report.
10. The defendant No. 1 through defendant No. 3 never directed the plaintiffs to purchase 100 x 100 sq. feet of lands for the site and to manufacture 2 lacs of bricks for the purpose. The aforesaid criteria never formed basis for the selection of a dealer of defendant No. 1. It was denied that the plaintiff No. 1 being a local candidate deserved special preference, since the advertisement was wide enough to cover a candidate from the State of Bihar as a whole.
11. The statement made in the plaint regarding investment of huge amount of money by the plaintiffs for the purchase of land and bricks, were not within the knowledge of defendant Nos. 1 and 2 and they had never advised the plaintiff No. 1 to procure any land or to stack bricks thereon. No contract had been entered into between the plaintiffs and the defendants and so question of part performance by the defendants did not arise. Therefore, the plaintiff was not entitled to any relief and the suit was fit to be dismissed with cost.
12. The defendant No. 3 in his written statement had almost adopted the same defence as put forward by the defendant Nos. 1 and 2 in their written statement with slight variations.
13. The case of defendant No. 5, who has also filed separate written statement is perfectly in the line with that of defendant Nos. 1 and 2 and also of defendant No. 3. He asserted that disclosure of information cannot be equated with assurance to the plaintiff. He further says that purchase of land by the plaintiff might have been made with the intention of earning money under areas surrounded by college, water ways and other 'Government Offices'.
14. On the basis of the pleadings of the parties, following issues were framed for consideration :-
1. Is the suit as framed maintainable ?
2. Have plaintiffs any right or cause of actions of suit ?
3. Is the suit bad for estoppel, waiver and acquiescence ?
4. Is the suit was under the provisions of Special Relief Act ?
5. Has the Court jurisdiction to try the suit ?
6. Did the oral instructions, tacit assurance and understanding given or extended by the defendant or defendants 1 to 3 either collectively or individually amount to oral contract ?
7. Did the plaintiff fulfil their part of contract ?
8. Is the decision of the interview committee rejecting the case and claim of the plaintiff legal, valid, just, proper and based on adequate basis or is capricious, whimsical and arbitrary ?
9. Have the plaintiffs better preferential claim over the two defendants 4 and 5?
10. Have the plaintiffs better qualified criteria, procedure and paraphernalia laid down in the notification dated 19.4.1979 advertised in the local paper ?
11. Are the plaintiffs entitled to get relief as prayed for ?
12. Are the plaintiffs entitled to any other relief or reliefs, it so, to what extent ?
15. From perusal of the judgment of the trial Court it appears that the trial Court has discussed issue Nos. 6, 7 and 11 simultaneously and after full discussion on the issues the trial Court has held that all the facts and the averments made in the plaint clearly establish that there has been no contract, muchless, oral contract, between the plaintiff and the defendants. The trial Court further held that the case of the alleged contract with the defendant is absolutely false and as there was no contract between the parties, as such the question of breach of contract does not arise and hence the plaintiff is not entitled to any mandatory injunction and accordingly, he decided the issue Nos. 6, 7 and 11 against the plaintiff. From perusal of the judgment of the trial Court it further transpires that the trial Court has dealt with issue Nos. 8, 9 and 10 simultaneously and after thorough discussion he decided all the abovementioned issues against the plaintiff and finally the trial Court dismissed the suit.
16. Against the said judgment of the trial Court, the plaintiff-appellant preferred an appeal bearing misc. title appeal No. 26/85/32/87 which was disposed of on 17.3.1990 by Shri Madan Mohan Verma, 2nd Additional District Judge, Begusarai whereby he reversed the findings of the trial Court and decreed the suit of the plaintiff. Against the said judgment of reversal passed by 2nd Additional District Judge, Begusarai, these second appeals have been preferred.
17. At the time of admission of this appeal, following substantial questions of law were framed :-
1. Whether in a suit for specific performance of contract the plaintiff is at all entitled to a kind of mandatory injunction sought for or entitled to damages on proof of breach of contract ?
2. Whether the judgment of that first appellate Court is founded upon the evidence on record ?
18. During the hearing of these appeals only the appellants' lawyer appeared before me to argue these appeals but none appeared on behalf of the respondents in both these appeals. It was submitted on behalf of the learned Advocate of the appellants that substantial questions of law have not been properly framed and then after hearing the learned Advocate, the following substantial questions of law were formulated on recast:-
1. Whether mandatory injunction can be granted in a suit to prevent the breach of a contract, the performance of which would not be specifically enforced
2. Whether the oral instructions, information, assurance given by the lower official of a company not authorised to make agreement on behalf of the company would amount to oral contract ?
Substantial Question of Law No. 1.
19. According to the submission of the learned Advocate of the appellants, Section 10 of the Specific Relief Act, 1963 lays down the principle where specific performance of contract can be enforced whereas Section 14 of the Act lays down the principle where contracts cannot be specifically enforced. He submitted that according to the pleading of the plaintiffs, the case of the plaintiffs will be covered by Section 14(1)(a) and (c) of the Act which says that a contract for non-performance of which compensation in money is an adequate relief and a contract which is in its nature determinable cannot be specifically enforced.
20. In order to appreciate the argument of the learned Advocate of the appellants, I would like to refer Section 10 and Section 14 of the Specific Relief Act, 1963. Section 10 of the Act reads as follows :-
Section 10-Cases in which specific performance of contract enforceable.-Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the Court, be enforced,-
(a) when there exists no standard for ascertaining actual damage caused by the non-performance of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.
Explanation.-Unless and until the contrary is proved, the Court shall presume,-:
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money: and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases :-
(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff.
21. Section 14 of the Specific Relief Act reads as follows :-
Section 14-Contracts not specifically enforceable.-(1) The following contracts cannot be specifically enforced, namely ;-
(a) a contract for the non-performance of which compensation is an adequate relief;
(b) a contract which rund into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the Court cannot enforce specific performance of its material terms;
(c) a contract which is in its nature determinable ?
(d) a contract the performance of which involves the performance of a continuous duty which the Court cannot supervise.
(2) Save as provided by the Arbitration Act, 1940, no contract to refer present or future differences to a arbitration shall be specifically enforced; but if any person who has made such a contract (other than arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit.
22. Thus, from perusal of Section 10 of the Act it appears that Section 10 lays down principles where specific performance of contract can be enforced whereas Section 14 lays down the principle where contracts cannot be specifically enforced. Section 14(a) says that a contract for non-performance of which compensation is an adequate relief cannot be specifically enforced whereas Section 14(1)(c) says that a contract which is in its nature determinable can also not be specifically enforced. According to the submission of the learned Advocate of the appellants, the case of the plaintiff is that as a result of non- performance of contract i.e. refusal to grant dealership by the defendants the plaintiff suffered a loss of rupees one lac due to purchase of land as well as bricks. The learned Advocate further submitted that this averment in the plaint itself shows that the loss suffered by the plaintiff was ascertainable for which the plaintiff was entitled to bring suit for compensation and as such, under the provisions of Section 14(1)(a) of the Act the suit for specific performance of such type of contract is barred. In support of his argument, the learned Advocate of the appellants has placed reliance upon the decision reported in AIR (29) 1942 Lahore 47 (Sardar Gulab Singh, appellants v. Punjab Zamindara Bank, Ltd., respondents). Placing reliance upon the abovementioned judgment, the learned Advocate has referred last paragraph of the said decision which is as follows :-
It has been invariably held that an injunction will not be issued in the case of contracts which cannot be specifically enforced, and the Gourts have always held that where breach of the contract can be adequately compensated in damages an injunction will not be issued.
Again he referred the decision reported in (M/s Rajasthan State Electricity Board, Jaipur, Petitioner v. M/s. Hindustan Brown Boveri Ltd., Bombay, Respondent), He has referred paragraph 7 of the said decision which is as follows :-.A reading of these two sections together shows that before an injunction could be granted for preventing the breach of a contract certain conditions have to be satisfied. One such condition inter alia is that if the contract would not be specifically enforced, it will not be competent for the Court to grant an injunction.
He has further placed reliance upon the decision reported in : AIR1963Cal132 (Haridas Mundra, appellant v. National and Grindlays Bank Ltd., Respondent) which also says that where in a suit for perpetual injunction, alternative adequate relief by way of pecuniary compensation is available it is good ground for refusal of relief for perpetual injunction. On the strength of the above decisions, the learned Advocate of the appellants argued that according to the averments made in the plaint itself the actual damage caused to the plaintiffs due to non-performance of contract was ascertainable and the plaintiffs have themselves assessed the loss of rupees one lakh and as such under Section 14 of the Specific Relief Act, 1963 such contracts cannot be specifically enforced and therefore the suit for mandatory injunction for specific performance of such contract is barred and not maintainable under Section 41 of the said Act. He further submitted that not only this but the nature of contract i.e. allotment of petrol pump is such type of contract which is determinable at any stage and under Section 14(1)(c), such contract cannot be specifically enforced and therefore any suit for mandatory injunction for enforcement of such contract is barred under Section 41 of the Specific Relief Act. I fully agree with the argument of the learned Advocate of the appellants and hold that in a suit for breach of contract where compensation is an adequate relief or where the nature of contract is such which is determinable at any stage the suit for mandatory injunction does not lie under the provisions of Section 41(e) of the Specific Relief Act, 1963 and accordingly, this substantial question of law No. 1 is answered.
Substantial Question of Law No. 2
23. It has been submitted on behalf of the learned Advocate of the appellants that from plain reading of the plaint it would be established that the requirements of law for valid contract were never fulfilled and the plaintiff wrongly assumed the assurance of defendant No. 3 that defendant No. 3 was giving him offer for dealership of proposed petrol pump on fulfilling certain conditions. He submitted that the entire contents of the plaint will show that even if it is presumed that the defendant No. 3 had given any assurance to the plaintiff No. 1 that if he would fulfil certain conditions then the defendant No. 1 (company) will grant dealership to him for setting up a petrol pump such assurance of defendant No. 3 will not amount to proposal for agreement as the plaint does not show that the defendant No. 3 was authorised on behalf of defendant No. 1 to enter into any such agreement for giving dealership to the plaintiff for setting up a petrol pump on fulfilling certain conditions and as such when the defendant No. 3 was not competent to make such agreement on behalf of the company, his assurance to the plaintiff that on fulfilling certain conditions defendant No. 1 would grant dealership of proposed petrol pump can at best be said to be an information, advice, instruction and assurance given by defendant No. 3 to the plaintiff No. 1 and such oral instruction, information and assurance given by the lower official of a company would not amount to oral contract. I have gone through the plaint and it appears that the plaintiff has nowhere stated in the plaint that the defendant No. 3 was authorised to make agreement on behalf of the defendant No. 1, as such, the submission of the learned Advocate of the appellants seems to be correct that the defendant No. 3 being a lower rank official of the company was not authorised to make any contract on behalf of the company with any person.
24. The learned Advocate of the appellant has further argued that the averments made in the plaint by the plaintiffs do not disclose that the ingredients of contract have been fulfilled. In order to arrive at the finding that the parties had arrived at any contract, I would like to refer Section 2(a), (b), (e), (f), (g) and (h) of the Indian Contract Act, 1872.
Section 2(a) runs as follows :-
When one person signifies to another his willingness to do or to abstain from doing anything with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal;
Section 2(b) runs as follows :-
When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise;
Section 2(e) runs as follows :-
Every promise and every set of promises, forming the consideration for each other, is an agreement;
Section 2(f) runs as follows :-
Promises which form the consideration of part of the consideration for each other, are called reciprocal promises; Section 2(g) runs as follows :- An agreement not enforceable by law is said to be void;
Section 2(h) runs as follows :-
An agreement enforceable by law is a contract.
25. The above definition fully establishes that only those agreements are contract which are enforceable by law but the agreement not enforceable by law is void. The question is whether the assurance given by defendant No. 3 to the plaintiff for grant of dealership by defendant No. 1 for proposed petrol pump on fulfilling certain conditions can be deemed to be an agreement enforceable by law. The plain reading of the plaint will show that the plaintiff has nowhere stated in the plaint that the defendant No. 3 was authorised by the company (defendant No. 1) to make any agreement on behalf of the company for issuing dealership for proposed petrol pump and as such, even if it is presumed that the defendant No. 3 had given such assurance to plaintiff No. 1 such assurance cannot be termed to be an agreement enforceable in law because defendant No. 3 was not competent to make such agreement and as such any such agreement, if any, between the defendant No. 3 and the plaintiff was void. Para-4 of the plaint which is said to be the basis of talk forming agreement between the defendant No. 3 and the plaintiff simply shows that the defendant No. 3 had supplied some information to the plaintiff that the defendant No. 1 was going to set up a petrol pump at Begusarai Rosera High Way between 15 to 16 kilometers for which a dealer will be appointed by the company and such information cannot be treated as proposal. I would like to quote paragraph 4 of the plaint which runs as follows :-
That the defendant No. 3 representing his company furnished information in presence of defendant No. 2 that certain dealers are going to be employed by the I.B.P, one such being a dealer between 15 to 16 km by the side of Begusarai Rosera High Way and encouraged the plaintiff No, 1 that he being a local man of Manjhaul by the side of Road had better prospects for the job and satisfying the criteria laid down by the company for its illegibility if scheduled tribes or scheduled castes or co- operative or registered consumers co-operative societies candidates did not turn up.
26. The above referred paragraph of the plaint does not show that the defendant No. 3 had given any proposal to the plaintiff to fulfil certain requirements in order to obtain the dealership licence of the petrol pump rather the defendant No. 3 had simply furnished certain informations to the plaintiff No. 1 that defendant No. 1 was going to set up a petrol pump at Begusarai Rosera Road and for that purpose the defendant No. 1 will appoint a dealer and the plaintiff being a local person can get the dealership licence if he fulfills certain conditions. This can at best be said to be a sincere advice of defendant No. 3 to the plaintiff and cannot be termed to be a 'proposal' in the eye of law. Thus, from the contents of the plaint itself it appears that the defendant No. 1 had not arrived at any agreement with the plaintiff for grant of dealership licence for setting up a petrol pump at Begusarai Rosera High Way and the defendant No. 3 being lower rank official of the defendant-company was never authorised to make such agreement on behalf of the defendant No. 1. I am further of the view that oral instruction, information and assurance given by the official who is not authorised to make agreement on behalf of the company cannot be termed as oral contract and accordingly, this substantial question of law is answered.
27. In the result, I find merit in both these appeals and accordingly, the same are allowed and the judgment and decree dated 17.3.1990 passed by 2nd Additional District Judge, Begusarai in Title Appeal No. 26/1985/32/1987 are hereby set aside and the judgment and decree dated 17.9.1985 passed by Sri S.B. Choudhary, Munsif 1st, Begusarai in Title Suit No. 65 of 1980 are hereby confirmed.