ORDER U.N. Bhachawat, J.-1 This is an appeal by the plaintiff arising out of a suit for permanent injunction and damages being Civil Suit No. 39-B of 1977 in the Court of 5th Additional District Judge, Bhopal. 2. The plaintiff which is a limited company employed the defendant No.1 in its service as Research and Development Officer on the 15th March, 1971 on the terms and conditions agreed between the parties for a period of 5 years and thereafter until terminated at any time by either party giving to the other party six calendar months' notice in writing The terms relevant for the purposes of the decision of this appeal extracted from the contract are set out below: "XX XX XX XX 2. This Agreement shall have effect from 15th March, 1971 and shall continue for a period of five years and thereafter until terminated at any time by either party giving to other party six calendar months' notice in writing Nothing herein contain shall be deemed to affect the employer's right to terminated this Agreement forthwith or at shorter notice as provided hereinafter and according to the Rules of the Company. XX XX XX XX 5. If the employer sends the employee abroad for training or any other purposes and the employee leaves the services before expiry of the contract of service, the employee shall be bound to reimburse to the employer all the expenses incurred by them for such foreign visit. The amount of such expenses calculated by the employer shall be final and the employee shall have no right to question the same. 6. The employee shall execute a separate security, fidelity and indemnity bond and oath of allegiance in terms of the standard form of the employer simultaneously with the contract of service and the employee hereby agrees and undertakes to fully abide by the provision thereof. 7.
6. The employee shall execute a separate security, fidelity and indemnity bond and oath of allegiance in terms of the standard form of the employer simultaneously with the contract of service and the employee hereby agrees and undertakes to fully abide by the provision thereof. 7. The employee hereby agrees and undertakes with the employer as under: XX XX XX XX (c) To devote his whole time and energy exclusively to the business and interest of the employer and not without the previous consent in writing of the employer engage himself or be concerned directly or indirectly with any other trade business or occupation whatsoever, not to take or accept any office or position whether honorary or otherwise in any other firm, concern, enterprise, or any other person whomsoever and not to give any advice or assistance to any such firm, concern or enterprise or person: XX XX XX XX 9. The employee agrees not to take any other employment or service without the previous consent in writing of the employer during the duration of this Agreement nor directly or indirectly take part or serve at any factory, industry or concern interested in the sale or manufacture of compressed wood, glass laminates, cast epoxies and all other associated and other activities carried on by the employer from time to time. It is further specifically agreed and declared that this negative covenant prohibiting the Employee from engaging himself as stated in this clause and at any place in this agreement shall apply not only during duration of the employment but also for a minimum period of two years from the date of cessation of service of the employee with employer." After this employment, the defendant No.1 was sent, by the plaintiff to U.K. for training at the factory of its foreign collaborator M/s Parmali Limited Gloucester, U.K. and an agreement for this training regarding the terms and conditions agreed to between the parties, namely, the plaintiff and defendant No.1 was executed on the 1st of July, 1974. The relevant part of this agreement material for the decision of this appeal is set out below: XX XX XX XX "4. The Company will pay all costs as indicated above in consideration of which the Trainee has agreed to serve the company in India for at least Five (5) years from the date of his return to Bhopal in the grade of Rs.
The Company will pay all costs as indicated above in consideration of which the Trainee has agreed to serve the company in India for at least Five (5) years from the date of his return to Bhopal in the grade of Rs. 2200-150-2950. 5. It is hereby agreed and declared that if the Trainee desires to leave the services of the Company before the completion of five years, he can do so only after reimbursing to the Company all the expenses incurred by the Company for such foreign visit, and after complying with any other conditions included in his existing contract of service." 3. Defendant No.1, after return from his training abroad joined his duty with the plaintiff herewith in India at Bhopal on or about 5th October, 1974. On 5th of May, 1976, defendant No.1 submitted his resignation and desired to be relieved on or before 5th November, 1976. The plaintiff vide its reply dated 25th September, 1976, communicated to the defendant that the plaintiff had spent a sum of Rs. 34,730 for his specialised training in U.K.; the defendant No. 1 was, according to the terms and conditions of the services dated 15-3-1971 and 1-7-1974 liable to pay this sum and after the payment of this sum, he would be relieved on the date desired by him; but according to the terms and conditions contained in the contract, he would not be entitled to take up any employment or engage himself directly or indirectly with any other industry carrying on the business similar to that of the plaintiff tll 4-10-1981 and if he does so, a suit for injunction for restraining him from doing so would be filed against him. Defendant No. 1 vide his letter dated 4-11-1976, disowned the claim of the plaintiff made in the forequoted notice and left the service of the plaintiff on 5th November, 1976, and joined service with defendant No 2. 4.
Defendant No. 1 vide his letter dated 4-11-1976, disowned the claim of the plaintiff made in the forequoted notice and left the service of the plaintiff on 5th November, 1976, and joined service with defendant No 2. 4. The plaintiff company has, therefore, filed the present suit on 17th June, 1977 claiming a decree for injunction restraining defendant No. 1 till 4-10-1981 from serving defendant No. 2 or from directly or indirectly taking part or serving at any other factory, industry or concern or firm interested in the sale or manufacture of compressed woods, glass laminates cast apoxies and all other associated articles and other activities carried on by the plaintiff from time to time; restraining defendant No.2 from continuing defendant No. 1 in its service till that period i.e. 4-10-1961 and also for damages estimated at Rs. 6,00,000/- (Rs 2,00,0001-, the amount which the plaintiff shall have to spend for training new appointee in place of defendant No. 1 and the loss that the plaintiff would suffer till the new appointee picks up the work left incomplete by defendant No.1 and Rs 40,000/- loss due to competition in business that the plaintiff has to face with defendant No.2, the company which is reaping the advantage of the expertised knowledge of defendant No. 1). 5. Both the defendants have in their separate written statement resisted the claim of the plaintiff on various grounds including the unreasonableness, invalidity and unconstitutionality of the negative covenants. Defendant No. 1 has, while admitting the agreements dated 15-3-1971 and 1-7 1974, inter alia contended that the contracted period of service was five years and thereafter he was entitled to leave it on giving six months' prior notice, which he has complied with and has committed no breach. Defendant No.2 has, while denying all the allegations, inter alia contended that he had no knowledge of the alleged contracts between the plaintiff and defendant No.1. 6. The plaintiff had, along with the plaint, filed an application for ad 'interim injunction in terms of injunction prayed for in the main suit. 7. The trial Court dismissed the application for ad interim injunction holding that there is no prima facie case in favour of the plaintiff. 8.
6. The plaintiff had, along with the plaint, filed an application for ad 'interim injunction in terms of injunction prayed for in the main suit. 7. The trial Court dismissed the application for ad interim injunction holding that there is no prima facie case in favour of the plaintiff. 8. In view of the trial Court, the term of service as stipulated in the contract dated 15-3-71 expired on 14-3-76 which was to continue further in case it was not terminated by either party by giving six months' prior notice to the other party and as defendant No.1 gave resignation on 5-5-76 desiring to be relieved from the job on 4-11-76, the terms of the agreement were complied with by the defendant and, therefore, prima facie the negative clause cannot hold the field after 4-11-76. In view of the trial Court, the agreement dated 1-7-74 which bound defendant No.1 to serve for a period of five years from the date of his joining at Bhopal after his return from abroad did not extend the operation to the negative covenant also upto that period of five years from 5-10-74, that is, the date on which defendant No.1 joined the plaintiff at Bhopal after his return from abroad. 9. The learned counsel for the plaintiff-appellant submitted that he had already conceded in the trial Court that the negative covenant contained in clause 9 of the agreement providing for its operation for a period of two years from the date of cessation of service of the employee was unreasonable and as such unenforceable, but contended that in the first contract dated 15-3-71, the period of service stipulated was 5 years which was during the subsistence of that contract, extended by the second agreement dated 1st of July, 1974 for a further period of 5 years from the date of return of defendant No. 1 to Bhopal after finishing his training abroad where he was sent by the plaintiff's company and on this calculation as defendant No.1 admittedly joined at Bhopal on 5-10-1974, after his return from abroad, the stipulated period of service is to expire on 4-10-79 till which period the negative covenant of the contract is in operation. He also argued that the trial Court has not correctly interpreted clauses 4 and 5 of the second agreement.
He also argued that the trial Court has not correctly interpreted clauses 4 and 5 of the second agreement. His submission was that the expression "and after complying with any other condition included in his existing contract of service" clearly indicates that the prohibitive covenant contained in clause 9 of the first agreement dated 15-3-71 was kept alive for another period of 5 years from the date of return of defendant No.1 to Bhopal and joining the plaintiff. He argued that on a correct interpretation of this clause, it can safely be held that the finding of the trial Court, that the plaintiff has no prima facie case, is erroneous. Hr further submitted that the trial Court has found the question of irrepairable injury and balance of convenience, the other important principles to be applied for considering the grant of refusal of ad interim injunction in favour of the plaintiff and argued that prima facie case. if found in favour of the plaintiff, the plaintiff is entitled to the grant of ad interim injunction. 10. The arguments of the learned counsel for defendants Nos.1 and 2 in counter were that as held by the trial Court, there is no prima facie case in favour of the plaintiff; that the plaintiff has claimed damages in the suit for the alleged breach of the contract and when the alleged injury can be compensated by award of damages, no injunction should be granted. It was also argued that in the event of the plaintiff's suit for permanent injunction being dismissed, defendant No.1 on his success would not be adequately compensated for the damages that he would sustain, from being prevented to do the acts mentioned in the negative covenant, between the time of passing of the ad interim injunction till the final decision of the case, and therefore, the balance of convenience is in favour of defendant No. 1. It was also argued that the terms of the negative covenant are vague and too general and the issuance of the injunction in those terms would completely throw defendant No.1 out of employment and/or it would be an indirect compulsion on defendant No.1 to join the service of the plaintiff for which he cannot be compelled in law.
It was also argued that the terms of the negative covenant are vague and too general and the issuance of the injunction in those terms would completely throw defendant No.1 out of employment and/or it would be an indirect compulsion on defendant No.1 to join the service of the plaintiff for which he cannot be compelled in law. It was also argued that when defendant No.2 has categorically denied and there is nothing on record to the contrary that it II manufacturing the articles or the articles similar to the nature being manufactured by the plaintiff, there is no justifiable reason for the grant of ad-interim injunction. 11. Section 42 of the Specific Relief Act, 1963 which corresponds with section 57 of the repealed Act indicates that the Court is not precluded from enforcing a negative covenant preventing an employee from working elsewhere during the term covered by the agreement The principles governing the exercise of the powers under this section are set out in the decision of the Supreme Court in Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. Ltd. AIR 1967 SC 1098 The principle discernible from this decision is that the granting of an injunction under section 42 of the Act is discretionary; no injunction will be granted if the contract is unconscionable or excessively harsh or unreasonable or one sided or the virtual effect of its grant would be to compel the performance of the service or to remain idle i.e. to preclude the defendant from working in any trade or profession whatsoever. This decision does not lay down the principles for the grant or refusal of ad-interim injuction. Further in this case, the breach was not at all doubtful. 12. The principles for grant of interlocutory injunctions in suits based on the negative covenant in the contract are discussed in paragraph 800 at pp. 381, 382 of Vol. 21 Halsbury's Laws of England (Third Edition) which is set out below :- "800. Interlocutory injunctions-In exercising its jurisdiction by way of interlocutory injunction the Court acts upon the principle of preventing irrepairable injury.
381, 382 of Vol. 21 Halsbury's Laws of England (Third Edition) which is set out below :- "800. Interlocutory injunctions-In exercising its jurisdiction by way of interlocutory injunction the Court acts upon the principle of preventing irrepairable injury. If a covenant is clear and the breach clear, and serious injury is likely to arise from the breach, the Court will interfere before the hearing to restrain the breach, but if the covenant is obscure, or the breach doubtful, and no irrepairable damage can arise to the plaintiff, then the question resolves itself into a question of comparative injury, whether the defendant will be more damnified by the injunction being granted, or the plaintiff by its being withheld." The principles enumerated hereinabove would apply where the injunction asked for is mandatory injunction to enforce a negative contract. I would refer in this respect paragraph 807 of the aforesaid volume of Halsbury's Laws of England, which is set out below :- "807; Mandatory injunction.- Where the injunction asked for is a mandatory injunction to enforce a negative contract, principles similar to those previously discussed apply, and the main point is whether the contract has been broken or not. In such cases, as a general rule, a mandatory injunction will be granted although no damage or injury is shown, though in special circumstances the Court may refuse the mandatory injunction and give damages Instead. " 13. Now it is in the light of the legal position discussed hereinabove that the validity of the impugned order has to be examined. 14. Albeit as already stated herein above, various grounds were indicated in the arguments addressed to this Court, which might have been equally important, I think in all the circumstances to deal first with that ground which weighed with the trial Court for refusing the injunction. 15. The relevant facts, which are no longer disputed are that the defendant had joined the plaintiff at Bhopal on 5-10-1974 and had given six months' notice to the plaintiff prior to leaving the job and had left the plaintiff after the expiry of the notice period. It is also undisputed that the agreement dated 1-7-74 is supplementary to the agreement dated 15-3-71 and was in relation to the training of the defendant abroad.
It is also undisputed that the agreement dated 1-7-74 is supplementary to the agreement dated 15-3-71 and was in relation to the training of the defendant abroad. On a plain reading of clause 2 of the agreement dated 15-3-71, either party was entitled to terminate the service by six months prior notice to the other side after 5 years. The question is whether the expression "and after complying with any other conditions included in this existing contract" can be read so as to extend the 5 years service period specified in clause 2 of the agreement dated 15-3-71 upto 4-10-79 calculating the period from 5-10-1974. For the reasons to follow, prima facie, it appears that the expression in clause 5 of the agreement dated 1-7-74' and after complying with any other condition included in his existing contract of service" cannot be understood to mean that even after the expiry of the 5 years period that was agreed to as per clause 2 of the first agreement dated 15-3- 71 reproduced hereinabove, either party to the agreement was not entitled to terminate the agreement of service by giving six months prior notice. 16. I would like to set out here again clause 5 of the agreement dated 1-7-74 :- "It is hereby agreed and declared that if the Trainee desires to leave the services of the Company before the completion of five years, he can do so only after reimbursing to the Company all the expenses incurred by the Company for such foreign visit, and after complying with any other conditions included in his existing contract of service." (underlining is mine) On plain reading of the aforesaid clause it is clearly borne out that the defendant employee was permitted to leave the service after (i) making payment of expenses in connection with his training abroad, and (2) complying with the conditions existing in the contract. 17. The dictionary meaning of the word 'after' is behind in place, later in time (than), subsequent to, behind in place (Chamber’s 20th Century Dictionary). In view of this meaning of the word 'after', the date of leaving of service should be later in time to the compliance of condition, In other words, the conditions are precedent to the leaving of service.
In view of this meaning of the word 'after', the date of leaving of service should be later in time to the compliance of condition, In other words, the conditions are precedent to the leaving of service. Therefore, the expression "after complying with any other conditions" has a reference to those conditions which are to be fulfilled prior to the leaving of the service. The negative covenant, that is, not to serve for a particular period after leaving of the service can certainly not be complied with or fulfilled prior to the leaving of the service. From its very nature, it has to be complied with after the leaving of the service. In this view of the matter, the expression "after complying with any other conditions included in his existing contract of service." is referable to the condition of six months prior notice in clause 2 and payment of expenses provided in clause 5 of the agreement dated 15-3-71 and such other conditions which are capable of being fulfilled prior to the leaving of service. 18. As already stated hereinabove, the agreement dated 1-7-74 is supplementary to the original agreement. Clause 5 of the original agreement dated 15-3-71 reproduced hereinabove it-self provides a condition for sending the defendant abroad for training and it was in the context of that condition that the second agreement dated 1-7-74 was entered into. Thus, reading clause 5 of the original agreement dated 15-3-71 with clauses 4 and 5 of the agreement dated 1-7-74 what is obtainable is that in case the defendant serves for a period of 5 years from the date of his joining on his return after training from abroad, he was to be placed in the grade of Rs. 2200-150-2950 and in case he serves for this full term of 5 years from the date of his joining, he would not be required to pay the expenses that were incurred for the training of the defendant abroad, otherwise he was required to pay those expenses. In other words, he was to get a higher pay and grade and also a discharge for the expenses by serving the plaintiff for a period of 5 years from the date of his joining on his return after training from abroad. 19. In the light of the foregoing discussion, it is doubtful that defendant No.1 has committed a breach in joining employment with defendant No.2.
19. In the light of the foregoing discussion, it is doubtful that defendant No.1 has committed a breach in joining employment with defendant No.2. 20. Now, therefore, the question of comparative injury has to be examined i.e. whether defendant No.1 will be more damnified by the injunction being granted, or the plaintiff by its being withheld. In my view, defendant No. 1 would be more damnified obviously for the reason that if during the period the injunction order remains in operation, not only that defendant No.1 would not be able to continue with defendant No.2, but he shall not be entitled to serve any where else or engage himself in a business or a vocation calling for the utilisation or his alleged specialised expertise knowledge, and that way he will have to miss any good opportunity that he may get during the period the injunction order remains in force and that opportunity he may never get. The plaintiff has already claimed damages and the loss to the plaintiff on account of the deprivation of the services of defendant No.1 can be calculated in terms of money, whereas comparatively in the case of defendant No.1, it is difficult Thus, the injury to defendant No.1 would be greater if the injunction was granted and he should ultimately turn, out to be right, as compared to the plaintiff. Had it been the case where the breach was not doubtful, the matter would have been different. Defendant No. 1 having entered into the negative covenant with his eyes open, the question of balance of convenience and irreparable injury in that event would have been out of consideration. 21. In the result, the appeal is dismissed. However, before parting with this order, I would like to add a note of caution that whatever has been discussed hereinabove is a broad discussion relating to the matter of grant of interlocutory injunction and it cannot be said to be the final decision on merits of this case so as to fetter the conclusion of the trial Court on merits. The trial Court should come to its own free and independent conclusion after the trial on merits without being obsessed by its own order of refusal of the interlocutory injunction and by this order confirming that order.
The trial Court should come to its own free and independent conclusion after the trial on merits without being obsessed by its own order of refusal of the interlocutory injunction and by this order confirming that order. It is further observed that the trial Court should expeditiously dispose of the suit by taking it day after day once it takes it up for hearing after the issues are framed. The upper limit for disposal by the trial Court is upto 31st July 1979 The trial Court should dispose of this case by 31st July, 1979. 22. I make no order as to costs of this appeal.