JUDGMENT 1. :- The present appeal impugns the order dated Feb. 5, 1996 of the learned Additional District Judge No.3, Jaipur City, which granted temporary injunction in favour of the plaintiff respondent (for short the plaintiff) restraining the defendant appellant a Dutch Company (for short the defendant) from appointing any agent, commission agent for sale/distribution of their products other than through the plaintiff and from selling or causing to be sold their products directly to consumers in South Asian Association of Regional Cooperation (SAARC) Countries. 2. Reference is confined by me only to such material and undisputed facts which legitimately be taken into account at the interlocutory stage, in view of the fact that the trial of the suit has yet to conclude. 3. The defendant, a Dutch Company, is the manufacturer of Ophthalmological equipment and instruments of international standards which are being marketed in the Netherlands and elsewhere in the World. The defendant company was keen to expand their market by way of manufacturing and/or marketing of their products in India and its neighbouring countries. 4. The defendant company on August 25, 1993 issued a letter of exclusive distributorship in favour of the plaintiff conforming that the plaintiff company Ultrared Pvt. Ltd. was the representative of defendant company's products for all the countries India, Bangladesh, Srilanka, Nepal, Bhutan and Maldives. Plaintiff company was further authorised and obliged to give and guarantee service for the whole product Range. 5. The defendant company by a formal notice of termination dated August 26, 1994 terminated the distributorship agreement dated August 25, 1993. 6. Thereafter the plaintiff instituted a suit for declaration and permanent injunction against the defendant company in the trial court. The case of the plaintiff was that the defendant had entered into an oral agreement with the plaintiff for a period of five years and the agreement could not have been terminated. Alongwith the suit an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure (for short the Civil Procedure Code) was filed. The learned trial Judge decided the application and issued temporary injunction as mentioned hereinabove. 7. Alongwith the suit an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure (for short the Civil Procedure Code) was filed. The learned trial Judge decided the application and issued temporary injunction as mentioned hereinabove. 7. At this juncture I must indicate that interference in this appeal would be called for only if I reach the conclusion that the exercise of discretion by the trial court in favour of the plaintiff company is contrary to the settled principles for the grant of a temporary injunction or that it is arbitrary. 8. Wander Ltd. vs. Antox India (P) Ltd. (1990 Supp. SCC 727 at page 733-34) was the case where the factors to be considered for grant of an interlocutory injunction in a passing off action and the scope of interference by the appellate court with the exercise of discretion of court of first instance, were summarised and reiterated by their Lordships of the Supreme Court as under: "....... In such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunction. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the Court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion." After referring to these principles Gajendragadkar J. in Printers (Mysore) (P) Ltd. vs. Pothan Joseph ( 1960 (3) SCR 713 ) at page 721) observed- 'These principles are well established, but as has been observed by Viscount Simon in Charles Osenton vs. Johenston (1941 (2) All England Reporter 245) "... the law as to the reversal by a court of appeal of an order made by a Judge below in the exercise of his discretion is well established and any difficulty that arises is due only to the application of well settled principles-in art individual case.' "..." (Emphasis aided) 9. The question springing for consideration now is whether the exercise of discretion by the learned trial court in favour of the plaintiff to grant the interlocutory injunction is in accordance with the settled principles of law regulating grant of interlocutory injunctions or not ? 10. Mr. V.R. Dhond, learned counsel appearing for the defendant company vigorously canvassed that the learned trial court committed serious error in granting temporary injunction in favour of the plaintiff. The arguments advanced by the learned counsel may be summarised thus : (a) Plaintiff's case is totally unbelievable. Such a big arrangement namely that of distributorship and setting up of manufacturing plant and supply of technical know how and expertise for establishing a manufacturing plant would not be based only on oral agreement. (b) Injunction application became in fructuous as third party was appointed as Distributor vide letter dated October 7, 1994. (c) Proceedings are bad for non-joinder of a necessary party (d) Suit for injunction is misconceived. (e) The plaintiff company itself being in breach, would not have asked for any injunction. (f) There was inordinate delay in filing the suit. (g) It was not a fit case where injunction to perform negative agreement can be issued. 11. On the other hand Mr. C.K. Garg, learned Senior Advocate supported the impugned order and vehemently contended that the products of the defendant company had never seen the market in India or for that matter in any country coming under the SAARC. It was the plaintiff company Ultrared or its sister concern, which introduced the defendant company and its products in India in the year 1989. With a view to establish a manufacturing concern in India in collaboration and other guidance of the defendant company negotiations started between the defendant company and the Managing Director of the plaintiff company who is also a Managing Director of Kandarpa Associates. In this process even a draft agreement was sent by the defendant company to Kandarpa Associates vide letter dated Jan. 27, 1993 through Mr. In this process even a draft agreement was sent by the defendant company to Kandarpa Associates vide letter dated Jan. 27, 1993 through Mr. Frank Rustler, when he was visiting India, prior to the execution of the Indo Dutch Agreement, which only establishes that both the parties to the present litigation always required a formal written document. Ultimately an agreement had been executed between the defendant company and Indo Duttch Opthalmic (P) Ltd. on July 29, 1993. Prior to it a draft agreement had been sent by the plaintiff Company to the defendant company vide letter dated March 5, 1993. The said draft agreement was considered and corrected. The Indo Dutch Ophthalmic (P) Ltd. could not however be incorporated on account of objections raised by the Registrar of Companies. The plaintiff company Ultrared had to write a letter on August 23, 1993 where it was stated that so long as Indo Dutch Co. had not been finally incorporated, the working arrangements as contemplated in the 'Indo Dutch Agreement' would govern the relationship with respect to Distributorship and establishment of manufacturing plant with the defendant company on the one hand and the plaintiff Ultrared on the other. The defendant company accepted the proposal made in the said letter and issued on August 25, 1993 a letter of exclusive distributorship in favour of the plaintiff company for the defendant company's products for all the SAARC countries. Thus the terms as mentioned in the Indo-Dutch agreement were basically the terms, which were supposed to be carried out by the plaintiff company. 12. Learned counsel for the plaintiff company further urged that after the relationship between the plaintiff company and the defendant company had run into rough waters and had reached even to the portals of the lawyers the counsel for the defendant company vide his letter dated August 4, 1994 wrote to the plaintiff company that the sale and marketing of the products of the defendant company and the setting up of a manufacturing plant, scheduled to be carried out by Indo-Dutch Company under the'Indo Dutch Agreement' were in fact to be carried out by the plaintiff company. In view of the unequivocal admissions made by the defendant company through its counsel, the entire arguments of the learned counsel for the defendant company that there could not be an oral agreement for dealing with such a large project, is devoid of any force. In view of the unequivocal admissions made by the defendant company through its counsel, the entire arguments of the learned counsel for the defendant company that there could not be an oral agreement for dealing with such a large project, is devoid of any force. 13. So far the argument advanced by the learned counsel for the defendant company that injunction application became in fructuous as the third party was already appointed distributor, the learned counsel for the plaintiff company submitted that the so called letter dated October 7, 1994, whereby one Consolidated Products Pvt. Ltd. is claimed to have been appointed the distributor, is on the face of it a suspicious document in as much as it has been signed on Sept. 30, 1994 by the President of the defendant company and by the President of the third party (Consolidated Products Pvt. Ltd.) on November 22, 1994. On the top of the letter by which the third party is claimed to have been appointed as distributor is dated as October 7, 1997. When the letter is dated October 7, 1997 there could not be any reason why the President of the defendant company had signed it on Sept. 30, 1944. It appears that while making the document a trace was left from where it can be inferred that the document is not a genuine document and it was rightly found prima facie suspicious by the learned trial court. 14. It was next contended by the learned counsel for the plaintiff that third party was not a necessary party as it was only acting if at all, as an agent of the defendant company and once the defendant company was restrained, all would come to be restrained who were drawing powers from it. 15. Mr. Garg, learned counsel for the plaintiff further urged that the suit instituted by the plaintiff is not misconceived. Even if the damages had been claimed, the plaintiff would not be debarred from seeking prohibitory injunction. 16. Replying to the arguments of the defendant company that as the plaintiff itself committed breach therefore was not entitled for injunction, learned counsel for the plaintiff contended that differences between the plaintiff and the defendant arose for the machines which had been supplied by the defendant were found defective. The defects were only found when demonstration of machines took place. The learned trial court fully discussed this aspect. The defects were only found when demonstration of machines took place. The learned trial court fully discussed this aspect. Thus it cannot be said that the plaintiff was responsible for committing breach. 17. It was next contended that the argument in respect of delay also cannot be sustained as the negotiation between the parties continued upto January 1995. Learned trial court has considered this argument in detail. 18. Mr. Garg learned counsel further urged that it is well settled that the court can grant an injunction to restrain the breach of negative stipulation although the contract was one of which specific performance would not have been granted. 19. Mr. Garg, learned counsel lastly contended that the defendant company had no absolute power of cancellation of contract. Therefore before termination of contract reasonable notice was necessary. 20. Reliance was placed by Mr. Garg learned counsel on the following: (3) Evans Marshall & Co. Ltd. vs. Bertola S.A. (1973 (1) All ER. 992) (4) Decro Wall International SA vs. Practitioners (1971(2) All England Reporter 225) (5) Vijay Minerals Pvt. Ltd. vs. Bikash Chandra Deb AIR 1996 Calcutta 67 (6) Frank Simoes vs. Hada Leasing (1989(1) Civil L. J. 266) (7) International Oil Co. vs. Indian Oil Co. (AIR 1969 Madras 423) . 21. Submitting rejoinder, Mr. V.R.Dhond, learned counsel for the defendant company invited my attention towards various provisions of the Specific Relief Act and by placing reliance on the following authorities, submitted that the learned trial court did not exercise its discretion reasonably and in a judicial manner therefore this court should reassess the material and reach a conclusion different from the one reached by the learned court below - (8) Bairagi Mekap vs. Jagan Nath Temple (AIR 1966 Orissa 96) (9) S.K. Gupta vs. Hyderabad Allwyn Ltd. (AIR 1988 Delhi 324) (10) Indian Oil Corporation vs. Amritsar Gas Service ( 1991(1) SCC 533 ) (11) Ram Chandra Tanwar vs. M/s. Ram Rakhwal AIR 1971 Rajasthan 292 (12) Superintgedence Co. of India vs. Krishan Murari ( AIR 1980 Supreme Court 1717) (13) Southern Roadways Ltd. Madurai vs. S.M. Krishnan ( AIR 1990 Supreme Court 673) (14) Modern Food Industries vs. S.K. Bottlers (AIR 1984 Delhi 119) (15) Gopal Paper Mills vs. S.K.G. Malhotra (AIR 1962 Calcutta 61) (16) Gujarat Botteling Co. vs. The Coca Cola Co. of India vs. Krishan Murari ( AIR 1980 Supreme Court 1717) (13) Southern Roadways Ltd. Madurai vs. S.M. Krishnan ( AIR 1990 Supreme Court 673) (14) Modern Food Industries vs. S.K. Bottlers (AIR 1984 Delhi 119) (15) Gopal Paper Mills vs. S.K.G. Malhotra (AIR 1962 Calcutta 61) (16) Gujarat Botteling Co. vs. The Coca Cola Co. (JT 1995 (6) SC 3) (17) Whitewood Chemical Company vs. Hard Man (1891 Chancery Dn 416) 22. I have given my anxious and thoughtful consideration to the rival contentions and carefully scanned the impugned order as well as the documents and perused the case law. 23. The learned trial court discussed in detail the ingredients of prima facie case, balance of convenience and irreparable loss and granted temporary injunction in favour of the plaintiff company. The impugned order of the learned trial court runs in twenty three pages. On the basis of the undisputed facts and placing reliance on the letter of Advocate of the defendant company the learned trial court was prima facie satisfied that the defendant company made the plaintiff as sole selling agent in respect of the products of the defendant company for a period of five years. Learned trial court was also prima facie satisfied that letter dated October 7, 1994 whereby the agency of the plaintiff is said to have been terminated is a suspicious document. Learned trial court has assigned the reasons also for treating the said document suspicious. Placing reliance on Frank Simons vs. Hada Leasing (1989(1) Civil L.J. 266 (Delhi) the learned trial court observed that if agreement contains a negative covenant not to engage any other agency, such negative conversant can be enforced by the plaintiff and temporary injunction for performance of such negative covenant can be issued. Case of Ram Chandra Tanwar vs. Ramrakhmal AIR 1971 Rajasthan 292 was distinguished by the learned trial court. The learned trial court after observing that the plaintiff had proved the ingredients of prima facie case, balance of convenience and irreparable loss, granted temporary injunction in favour of plaintiff. 24. The above finding of the learned court below on which the grant of interlocutory injunction in favour of the plaintiff is based is, to say the least, a reasonable conclusion on the relevant material available at this stage. 24. The above finding of the learned court below on which the grant of interlocutory injunction in favour of the plaintiff is based is, to say the least, a reasonable conclusion on the relevant material available at this stage. The discretion exercised by the learned court below in granting the interlocutory injunction can not be said to be arbitrary, capricious or perverse. The learned court below while granting the said interim relief, did not ignore the settled principles of law regulating grant or refusal of interlocutory injunctions. 25. I see no good reasons at this stage to appreciate the case law cited at Bar and to reassess the material and reach an independent conclusion. It has only to be seen whether the conclusion reached by the learned trial court was reasonably possible on the material. Prima facie, it appears to me that the conclusion reached by the learned trial court in favour of the plaintiff is the more probable and reasonable on this material. 26. The serious legal questions raised before me by the learned counsel for the defendant company cannot be adjudicated upon in this appeal at this stage. Such questions can be decided only in the main suit as is held in Peer Gulam Naseer's case (1988(2) RLR Page 871) by this Court (Hon'ble N.M. Kasliwal J. as his Lordship then was). 27. Applying the settled principles indicating the scope of interference in an appeal against exercise of discretion by the trial court to grant an interlocutory injunction, I find no ground to take a different view or to interfere with the grant of temporary injunction. 28. The appeal therefore fails and is hereby dismissed. The impugned order stands confirmed. I may however add that the defendant company shall be at liberty to apply for discharge or variation of the interlocutory injunction if additional material or subsequent events justify such a course. 29. The record of the trial court be sent back forthwith. Parties are directed to appear before the trial court on September 24 1997. Costs easy.Appeal Dismissed. *******