V.R. Nathan Vs. Mac Laboratories (P.) Ltd. - Court Judgment

Venkataraman, J.

1. These are applications by the plaintiff in O. S. No. 3102 of 1966 on the file of the City Civil Court. Madras and the appellant in A. S. 371 of 1969 pending before us, for permission to amend the plaint. We shall state the facts more fully when disposing of the appeal itself. For the purpose of the present applications it is enough to state the following facts. The defendants Mac Laboratories (P.) Ltd., are manufacturers of pharmaceutical products in India and are also importers of some pharmaceutical products manufactured abroad. On 17-11-1951 they appointed the plaintiff. V. R. Nathan, as the sole distributors of their products for the then composite State of Madras. Mysore and Travancore-Cochin, with a commission of ten per cent of the profits. The defendants were to bear the organisational expenses etc. The plaintiff claims that he invested a large sum of money and did good business for the defendants and that in recognition thereof, for the mutual benefit Of both sides, another agreement was entered into on 14-5-1955. with effect from the 1st April 1955. By this agreement his tenure of distribution rights was guaranteed for 12 years from 1-4-1955, with an option to renew for a like period at the end of such term, subject to some further conditions about the commission. The plaintiff says that while he did his part of the work, the defendants failed to supply the necessary quantities of samples and pro-paganda materials and that this resulted in the decline of the sales. However, the plaintiff exercised his option of renewal for a period of 12 years by a letter dated 9-7-1966, but the defendants, who had been offering pin-pricks and making imaginary complaints as though he was at fault, sent a letter to him dated 30-8-1966, putting an end to the contract with effect from 31-8-1966. Therefore, preserving his right to claim damages, the plaintiff filed the suit O. S. 3102 of 1966 on the file of the City Civil Court. Madras, for a permanent injunction restraining the defendants from distributing, selling or otherwise dealing with their products either by themselves or by their representatives. The defendants denied the allgations in the plaint and contended that it was the plaintiff who was at fault and that, therefore, they were justified in putting an end to the contract.

2. Along with the plaint, the plaintiff filed an application for a temporary injunction pending disposal of the suit (I. A. 9305 of 1966). Injunction was granted by the trial Judge, but it was vacated by Alasiriswami, J., as he then was, on appeal by the defendants. The judgment of the learned Judge is reported in Mac Laboratories (P.) Ltd v. V. R. Nathan, (1967) 1 MLJ 353. The arguments before the learned Judge proceeded on the footing that the interim injunction was concerned only with the period upto 31-3-1967 and not with the further period of 12 years claimed by the plaintiff. Indeed, one of the factors taken into account by the learned Judge in allowing the appeal on 16-12-1966, was that the contract itself was to run only till 31-3-1967 and that the suit could not be disposed of before 31-3-1967. He observed-

'To give a temporary injunction would really be to enable the plaintiff to get what he wants in the suit itself.'

A Letters Patent Appeal (L. P. A. 12 of 1967) was filed and was dismissed on 5-4-1967 on the around that the period of the contract had expired.

3. After this. Mac Laboratories filed a suit O. S. 155 of 1967 on the Original Side of the Bombay High Court claiming a sum of over Rs. 2 lakhs as damages from the plaintiff for the alleged breach of contract. V. R. Nathan filed a counter claim to the tune of about Rs. 9 lakhs on the footing that the termination of the contract with effect from 31-8-1966 was illegal.

4. At this stage, the plaintiff filed an application I. A. No. 9170 of 1967, in the trial Court for amendment of the plaint by adding a prayer for a declaration that the termination of the contract with effect from 31-8-1966, was illegal. The amendment was allowed by the trial Court. The defendants preferred two revision petitions. They were disposed of by Veeraswami, J., as he then was. It was contended on behalf of Mac Laboratories that such a declaration would embarrass the Judge trying the counter claim of V. R. Nathan in the Bombay suit. The learned Judge accepted this submission but indicated that incidentally even for deciding the relief for injunction, the trial Court might have to so into the question as to whether the contract had been validly terminated by Mac Laboratories.

5. The suit O. S. No. 3102 of 1966 then came up for trial before Sri V. Krishnaswami Iyer, Asst. Judge. City Civil Court, Madras. He held, on a preliminary issue, that the suit was not maintainable under the provisions of Section 294 of the Companies Act. On the main issue he held that an injunction could not be granted. It may be mentioned that he simply followed the decision of Alagiriswami, J. though it was with reference to the interlocutory application. In view of these findings, he dismissed the suit.

6. Aggrieved by this, V. R. Nathan preferred A. S. 371 of 1969. After hearing elaborate arguments we indicated that the view of the learned trial Judge that the suit was not maintainable because of the provisions of Section 294 of the Companies Act would not be sustained. We shall give our reasons for this opinion later when disposing of the appeal itself. Thereafter. Sri M. S. Venkatarama Iyer, learned counsel for the appellant, urged that the learned trial Judge was wrong in negativing the relief of injunction merely on the strength of the decision of Alagiriswami, J. which was rendered only at an interlocutory stage pending disposal of the suit and he urged that even assuming for the sake of argument that the contract could not be specifically enforced as against the defendants, a negative injunction restraining them from distributing the products otherwise than to the plaintiff could be granted in view of Section 42 of the Specific Relief Act. 1963 (corresponding to Section 57 of Act. 1877). He further submitted that it was extraordinary that the trial Judge should dispose of the issue of injunction without reallv trying the substantial question whether the contract had been rightly rescinded by the defendant. As against these submissions. Sri S. Sampath Kumar, learned counsel for the respondent-defendant, Mac Laboratories, submitted that he was prepared to assume for the sake of argument that the allegations in the plaint were true, in particular that the termination of the contract by the defendants with effect from 31-8-1966 was wrongful. But he contended that even so damages would be the proper and adequate remedy and injunction should not be issued. We heard elaborate arguments on this question too. But at one stage. Sri M. S. Venkatarama Iyer thought it more prudent to amend the plaint by adding a claim for damages in the alternative. That is why the Dlaintiff filed these two applications, C. M. P. 8306 and 8475 of 19-74. In C. M. P. 8306 of 1974 he estimated the damages at a sum of Rupees 18,20.000. In C. M. P. 8475 of 1974 he has limited it to Rs. 10 lakhs, and he is prepared to pay court-fee of Rs. 13,525, under Appendix I of the High Court Fees Rules, the fee being calculated on the footing that after the amendment the suit will have to be tried on the Original Side of this Court and not by the City Civil Court, because the jurisdiction of the Citv Civil Court is limited to claims below Rs. 50,000/. The plaintiff has also urged in the amendment petitions that he is entitled to treat this as a suit for accounting and on that basis he has tentatively valued the relief of accounting at Rs. 1,000 and he is prepared to pay a court-fee of Rs. 75-50 under Section 35 (1) of the Madras Court-fees and Suits Valuation Act. 1955. It is further stated that the reliefs are claimed alternatively and not cumulatively, and that it is sufficient to pay court-fee for a sum of Rs. 10 lakhs. After setting off the court-fee already paid, he is prepared to Pay a sum of Rs. 13,142 as court-fee. Sri M. S. Venkatarama Iyer intimated to us that his client would be prepared to pay the court-fee within a week.

7. The amendment petitions are based on the proviso to Section 40 of the Specific Relief Act, 1963. The section itself may be quoted here in full:

'40. Damages in lieu of, or in addition to, injunction-

(1) The plaintiff in a suit for perpetual injunction under Section 38, or mandatory injunction under Section 39, may claim damages either in addition to, or in substitution for, such injunction and the Court may, if it thinks fit award such damages;

(2) No relief for damages shall be granted under this section unless the plaintiff has claimed such relief in his plaint;

Provided that where no such damages have been claimed in the plaint, the Court shall at any stage of the proceedings, allow the plaintiff to amend the plaint on such terms as may be just for including such claim;

(3) The dismissal of a suit to prevent the breach of an obligation existing in favour of the plaintiff shall bar his right to sue for damages for such breach'. Sri S. Sampathkumar learned counsel for the respondent-defendant, vehemently opposes these applications saying that they are very much belated, that they are lacking in bona fides and so on. But in view of the imperative language of the proviso which reauires that the Court shall grant the amendment, these submissions of Sri S. Sampath Kumar are futile. The plaintiff is entitled, as a matter of right, to have these amendments made and the only discretion left for the Court is about the terms, if any, on which he may be permitted to amend.

8. Even apart from the proviso, we would have been disposed to allow the amendment because of the special circumstances of this case. It is sufficient to refer to the decision of the Privy Council in Charandas v. Amir Khan, (1920) 47 Ind App 255 = AIR 1921 PC 50 which has been followed by their Lordships of the Supreme Court in L. J. Leach and Co. Ltd. v. Jardine Skinner and Co. : [1957]1SCR438 and P. H. Patil v. K. S. Patil : [1957]1SCR595 . It is true that V. R. Nathan has already filed a counter claim for Rs. 9 lakhs in the Bombay High Court, but prima facie there is a difficulty in the wav of his successfully prosecuting that counter claim, because Mac Laboratories have taken objection to that counter claim that it is barred under the provisions of Order II, Rule 2. Civil P. C., which says:

'Order II, Rule 2, Sub-rule (2) Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.

(3) A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs: but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.'

It may be stated here that though the plaintiff stated in his plaint in the suit O. S. 3102 of 1966 that he was reserving his claim for damages, he omitted to apply for leave of the City Civil Court to file a suit for damages later. To rectify this defect, he made an application before us. C. M. P. 7382 to give him the leave under Order 2, Rule 2. But objection was taken to this by Sri S. Sampath Kumar on behalf of the Mac Laboratories that this Court should not grant leave at this stage because the counter claim had already been filed. Learned counsel referred to the wording of Order 2. Rule 2, and contended that it prohibited V. R. Nathan from suing in respect of damages without the leave in contrast with provisions in other Acts where there is no prohibition against suing, but there is prohibition only against the Court granting a decree. Sensible of this defect, the plaintiff filed these present petitions C. M. Ps. 8306 and 8475 of 1974. It seems to us that the objection of Sri S. Sampath Kumar to the grant of leave required for under Order 2. Rule 2 is prima facie well founded and C. M. P. 7382 of 1974 may have to be dismissed. Hence unless these present amendment petitions C. M. Ps. 8306 and 8475 of 1974 are allowed, V. R. Nathan will be left without any remedy except the injunction; but in respect of that injunction the contention of Mac Laboratories is that damages would be the proper remedy. This contention of the defendants itself shows that it is absolutely necessary that the present amendment claiming damages in the alternative should be allowed.

9. Having regard to the special circumstances of this case, we do not think it necessary to impose any terms on the plaintiff in granting these amendments. The amendments will be allowed. Sri S. Sampath Kumar has given expression to an anxiety that the plaintiff may not pay the required coure-fee of Rs. 13,142 and he submits that till the court-fee is paid, the appeal should be kept pending and in that event he would press his submission that a negative injunction should not be granted. With reference to this submission. Mr. M. S. Venkatarama Iyer gives an assurance that the plaintiff will pay the sum of Rs. 13,142 within a week and that the defendant need not have any such apprehension. Under these circumstances, we think it right to have this matter called on 16-8-1974, within which time the plaintiff should pay the additional court-fee.