Prestige Pictures vs Sree Krishna Cinema (P) Ltd.

T.K. Basu, J.—This is an application on behalf of the Plaintiff for an injunction restraining the Defendant from exhibiting any film at the cinema house of the Defendant except those supplied or booked by the Plaintiff.

The Plaintiff carries on business as a distributor of cinematographic films. The Defendant is the lessee in respect of a cinema house at Bally known as Sree Krishna Cinema.

Mr. Gouri Mitter, appearing on behalf of the Plaintiff, relies on a written contract between the parties dated August 31,1967. Under the terms of the contract, the Defendant is to exhibit at the said cinema house only those films which are to be supplied and/or booked by the Plaintiff for a period of four years from September 22, 1967, with an option on the part of the Plaintiff to renew the contract for a further period of two years.

Clause 3 of the contract, inter alia, runs as follows:

That you have agreed and undertaken not to exhibit any other picture from any other Distributors, or supplier at your cinema during the said period of 4 years, commencing from 22nd September 1067 and that you shall make suitable arrangement with Distributors concerned for keeping in abeyance performance of pictures directly committed by you prior to this arrangement with us, if any, till and until you have duly performed this agreement with us.

The agreement is in the form of a letter addressed to the Defendant Sree Krishna Cinema (Private) Ltd. It is signed by a partner of the Plaintiff''s firm. It is confirmed by one Kamala Kanta Chatterjee on behalf of the Defendant company.

According to the Plaintiff, the said Kamala Kanta Chatterjee was the manager of the Defendant company, who was in management and in charge of the cinema house and the exhibition of films thereat. It is the case of the Plaintiff that the said Kamala Kanta Chatterjee was duly authorised to sign this particular contract on behalf of the Defendant company.

In the affidavit filed by Gosto Behari Sadhukhan on behalf of the Defendant company it is not disputed that Ramala Kanta Chatterjee was the manager of the Defendant until his death on January 30, 1968. It is further not disputed that the said agreement was signed by Kamala Kanta Chatterjee. It is contended, however, on behalf of the Defendant that the said Kamala Kanta Chatterjee did not have the authority to sign the said agreement on behalf of the Defendant and bind the Defendant thereby. According to the statements contained in the affidavit of Sadhukhan, Kamala Kanta Chatterjee was only authorised to sign contracts in the form of Standard Film Contracts approved by the East India Motion Pictures Association (hereafter referred to as the Association) of which both the Plaintiff and the Defendant are admittedly members.

Mr. Mitter in this connection drew my attention to the letter dated July 13, 1964, annexed to the affidavit of Sadhukhan. The said letter is in form of a notice to the Association wherein it is stated that only Kamala Kanta Chatterjee has the authority to sign ''booking slips'' and ''contracts'' on behalf of the Defendant company and no other person has the authority to do so. Relying on the contents of the above letter Mr. Mitter contends that I should prima facie hold that the said Kamala Kanta Chatterjee had the requisite authority to sign the contract on which the Plaintiff relies. Mr. Mitter submits that in terms of the letter dated July 13, 1964, the authority of Kamala Kanta Chatterjee to sign contracts on behalf of the Defendant company is not restricted to any particular type of contract.

Reliance was also placed on a letter dated March 8, 1968, whereby Gosto Behari Sadhukhan had notified the Association that the cinema house had been given to Prestige Pictures, the Plaintiff herein, ''as per arrangements with them'' and nobody else had the right to exhibit films there ''until further instructions from me. The arrangements referred to in the letter dated March 8, 1968, according to Mr. Mitter, is the written contract between the parties dated August 31, 1967, which is. the subject-matter of this suit.

Mr. Mitter also strongly relies on the fact that since September 22, 1967, which is the date when the agreement was to become effective, until July 1968, the Defendant had been exhibiting films which had been exclusively supplied by the Plaintiff and had not exhibited any films supplied by any other party. This fact is not disputed on the. affidavits before me.

On the basis of the above facts Mr. Mitter submits that the Plaintiff has established a prima facie case that there is a written contract between the parties which- contains an express negative covenant which should be enforced in the suit by an appropriate mandatory or perpetual injunction. The Plaintiff having established a prima facie case for the grant of a mandatory or perpetual injunction at the final hearing of the suit, its right should be protected and preserved by an interlocutory injunction in this application.

My attention was also drawn in this connection to Clause 14 of the written contract wherein it has been stated that all the other terms and conditions shall be as per Standard Film Renting Contract and rules and by-laws of the distributor''s section of E.I.M.P.A., Calcutta.

Reference is ''next made to Clause ll(j) of the Standard Film Contract which provides that the exhibitor covenants with the distributor not to use the said cinema or allow the use thereof during and on the dates fixed for the exhibition of each and every sound motion picture at each session (including matinees) of the said cinema. The said clause further provides that any breach of this covenant shall in addition to other rights of the distributor under the law entitle the distributor to an immediate injunction against the exhibitor preventing him from using it for any other purpose and, in particular, from showing and exhibiting any sound motion picture other than those which have been fixed by the distributor on the dates as fixed by the distributor.

According to the Petitioner, as stated in para. 27 of the petition, the Defendant, taking advantage of the closure of the Court on August 15, 1969, wrongfully and illegally discontinued the film Teerbhumi. which was booked by the Petitioner. In para. 14 of the petition it is stated that on the said date the Defendant exhibited a film called Sindurer Megh: in violation of the negative covenant contained in the contract.

According to Mr. Mitter, as there has been a breach of the negative covenant by the Defendant, the Petitioner is entitled to an injunction in terms of Clause ll(j) of the Standard Film Contract. Reliance is placed in this connection on a decision of the Supreme Court in the case of Seth Thawardas Pherumal Vs. The Union of India (UOI), for the proposition that if the parties have expressly stipulated to a particular term in a contract, the parties must be tied down to it.

Mr. B. Das, appearing on behalf of the Defendant, contended, in the first place, that the Petitioner was not entitled to an injunction since damages or compensation was an adequate remedy in the present case. According to Mr. Das, assuming that there has been a breach of the negative covenant, the damage that the Plaintiff can suffer in the present case is the loss on the sale of tickets on the basis of a full house for all the shows in the week less a sum of Rs. 2,500 which was payable to the Defendant under the agreement Since the loss to the Plaintiff can be quantified in exact terms, the Plaintiff is not entitled to an injunction since the loss and injury alleged to have been caused is not irreparable. My attention was drawn to Section 38(2)(b) & (c) of the Specific Relief Act, 1963, which provides that perpetual injunction would be granted only when there exists no standard for ascertaining the actual damage caused or likely to be caused by the invasion of the Plaintiff''s right or where the invasion is such that compensation in money will not afford adequate relief.

Mr. Das next submits that the balance of convenience is clearly in favour of the injunction not being granted. According to this contention, if the injunction is granted, the Defendant would have no option but to stop its business of exhibiting films at the said cinema house altogether. Thereby the Defendant may be compelled to commit breach of the terms of its lease with the landlord of the cinema house whereby the Defendant has agreed to pay a sum of Rs. 1,000 per month as rent.

On the merits of the case Mr. Das contended that since according to his client Kamala Kanta Chatterjee had no authority to execute the contract in the present case, the onus was on the Plaintiff to show that Mr. Chatterjee had such authority. Reference was made to Bow stead on Agency (13th ed., Article 87) for the proposition that no disclosed principal is bound by any act of his agent which is not within the scope of the agent''s implied or apparent authority unless the principal, in fact, authorised the agent to do the particular act. My attention was drawn to illustrations 6, 7, 8 and 9 under Article 87. Reliance was also placed on two English cases, viz. Baines v. Ewing (1866) L.R. 1 Ex. 320 and Daun v. Simmins (1879) 41 L.T. 783.

In my view, it is not necessary to deal with these authorities in detail. Even assuming that the onus is on the Plaintiff to prove that Mr. Chatterjee had the implied or apparent authority of the Defendant company to enter into the contract, the Plaintiff prima facie discharges that onus by relying on the letter dated July 13, 1964, to which I have made reference hereinbefore. That letter prima facie appears to have authorised Kamala Kanta Chatterjee to sign all contracts on behalf of the Defendant company. It is not the case of the Defendant that this authority in favour of Mr. Chatterjee was ever revoked at any time prior to his death.

Dealing with the question as to whether damage or compensation is an adequate remedy in the present case, Mr. Mitter submits that such considerations may be relevant in an application for grant of injunction in a suit for specific performance of an agreement. Such consideration, however, is not relevant or germane when the Court grants an injunction for the purpose of enforcing a negative covenant. Reference was made to the provisions of Section 42 of the Specific Relief Act, 1963, which is in the following terms:

Notwithstanding anything contained in Clause (e) of Section 41, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the Court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement:

Provided that the Plaintiff has not failed to perform the contract so far as it is binding on him.

It may be noted that this Section 42 corresponds to Section 57 of the Specific Relief Act, 1877, now repealed.

Reliance was placed by Mr. Mitter in this connection on a decision of our Court in the case of Burn & Co. v. McDonald ILR (1908) Cal. 854 and on the case of Doherty v. Allman (1878) 3 A.C. 709. In the latter case Lord Cairns L.C. observed as follows:

My Lord, if there had been a negative covenant, I apprehend, according to well-settled practice, a Court of Equity would have had no discretion to exercise. If parties, for valuable consideration, with their eyes open, contract that a particular thing shall not be done, all that a Court of Equity has to do is to say, by way of injunction, that which the parties have already said by way of covenant, that the thing shall not be done; and in such case the injunction does nothing more than give the sanction of the process of the Court to that which already is the contract between the parties. It is not then a question of the balance of convenience or inconvenience, or of the amount of damage or of injury-it is the specific performance, by the Court, of that negative bargain which the parties have made, with their eyes open between themselves. But, my Lords, if there be not a negative covenant but only an affirmative covenant, it appears to me that the case admits of a very different construction.

The above decisions came up for consideration before a Division Bench of this Court in Hind Palace (Private) Limited v. Mansata Film Distributors and Anr. Unreported decision in Appeal No. 142 of 1956. The subject-matter of the appeal was an application for injunction on the basis of a negative covenant u/s 57 of the Specific Relief Act, 1877. After referring to the above decisions Bose. J. (as he then was) observed as follows:

It appears to me that what Lord Cairns intended to convey in the passage quoted by me was that the Court will readily lend its hand to enforce a negative covenant by an injunction unless it is in the facts of any particular case found unreasonable to do so. At the same time it is made clear that considerations which usually weigh with a Court in granting a decree for specific performance need not influence the exercise of the discretion of the Court in the matter of enforcing negative covenants in a contract.

With utmost respect, I follow the decision of our Division Bench in the above case and hold that the fact that the damages may afford adequate relief to the Plaintiff in the present case is not a bar to an injunction being granted to enforce the negative covenant.

On the question of balance of convenience, Mr. Mitter submitted, in the first place, that it was not a relevant consideration in the present case. Alternatively, he submitted that the balance was clearly in favour of an injunction being granted. It is submitted that unless an injunction is granted, the Defendant may go on exhibiting other films in breach of the negative covenant. If by the time the suit is heard, the period of agreement expires, then the suit insofar as the grant of mandatory or perpetual injunction is concerned may become entirely infructuous. Since an interlocutory remedy is a step in aid of the final relief to which the Plaintiff may prima facie appear to be entitled, it is the duty of the Court, in the present case, to grant an interlocutory injunction so that the Plaintiff''s right to get a permanent injunction at the final hearing of the suit may be preserved. Mr. Mitter further submitted that his client had booked various films with different producers of films for the purpose of exhibition in the cinema house of the Defendant company. If the Plaintiff is not allowed to exhibit those films in the Defendants'' cinema house, his client will not only be liable for the breach of its agreement with those producers but may also lose future business and custom with those producers. This latter loss cannot be compensated in damages.

In my view, this contention of Mr. Mitter should be accepted. Assuming that the question of balance of convenience is relevant in the present case, I am of the opinion that the balance is clearly in favour of an injunction being granted as a step in aid of the final relief to which the Plaintiff appears to have established a prima facie case.

Lastly, Mr. Das drew my attention to a letter dated March 8, 1968, to which I have referred to hereinbefore. According to Mr. Das, this letter is a fresh contract between the parties and since it stipulates that all the booking of pictures, signing of booking slips etc. will be done by the Plaintiff ''until further instructions from me'', this contract is clearly terminable at the option of the Defendant. I am unable to accept this contention. This letter, on the face of it, is in continuation of a letter dated February 21, 1968. The letter of February 21, 1968, is a notice to the members of the Distributors'' Section of the Association whereby Gosto Behari Sadhu khan declares that he would henceforward sign all the booking slips, enter into contracts etc. in connection with Sree Krishna Cinema Private Limited and nobody else would be entitled to deal with the booking of the pictures. It appears from para. 13 of the affidavit in reply of Pream Paul Pasher, affirmed on September 11, 1969, that after the letter dated February 21, 1968, was written by Sadhukhan, the Petitioner contacted Sadhukhan and pointed out to him that he should not write such a letter in view of the subsisting agreement between the parties dated August 31, 1967. The Petitioner further threatened that if the letter was not withdrawn, the Petitioner would file a suit in this Court. According to the Petitioner, the letter of March 8, 1968, was thereafter written to the Distributors'' Section of the Association for withdrawing and superseding the earlier letter of February 21, 1968.

In my view, the Petitioner''s contention seems to be prima facie acceptable. In any event, the letter of March 8,1968, speaks of the right of the Plaintiff of exclusive booking at the Defendant''s cinema ''as per arrangement with them''. On the materials before me, I do not see what this arrangement can mean except the contract dated August 31, 1967, on which the Petitioner relies. This contention on of Mr. Das is, therefore, rejected.

All the contentions raised on behalf of the Defendant, therefore, fail.

In the result this application succeeds. The ad-interim injunction granted herein is confirmed. Costs in the cause.