Research › Search › Judgment

Rajasthan High Court · body

2013 DIGILAW 1068 (RAJ)

Chokhi Dhani Resorts Private Ltd. v. M/s. Essem Recreation

2013-05-23

BELA M.TRIVEDI

body2013
JUDGMENT 1. - Heard the learned counsels for the parties at length, on the application seeking interim injunction pending the civil misc. appeal. 2. The appellant-applicant has filed the Civil Misc. Appeal being No.1107/2013 under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the said Act"), challenging the order dated 07.03.2013 passed by the Additional District Judge No.15, Jaipur Metropolitan, Jaipur (hereinafter referred to as "the court below") in Misc. Application No.66/2013, whereby the court below has dismissed the application of the appellant filed under Section 9 of the said Act seeking the interim measures. The respondent has also filed the S.B. Civil Writ Petition being No.6958/2013 under Article 226 & 227 of the Constitution of India challenging the order dated 15.02.2013 passed by the court below in the said application being No.66/2013, rejecting the objection raised by the respondent as regards the jurisdiction of the court below, to hear the application filed by the appellant-applicant under Section 9 of the said Act. The Court has admitted both, the C.M.A. and the writ petition after hearing the learned counsels for the parties at length. In the present application, the appellant-applicant has prayed to grant the interim relief for restraining the respondent from using the Trade name/Trade Mark "Chokhi Dhani" in any form and manner including the use as a signage/advertisement/letter heads etc. and from conducting any business or trade in the said name, as well as from carrying on the identical/similar services rendered by the appellant directly or indirectly from the premises of the respondent and from carrying on any village fair services identical or similar to the services rendered by the appellant, till the disposal of the appeal. 3. The appellant-applicant had filed the application under Section 9 of the said Act before the court below, seeking various interim measures as contained in the said application, alleging interalia that the appellant was a company duly registered under the Companies Act, 1956, having its registered office at Jaipur and that the respondent was a partnership firm having its office at Ahmadabad. It was further averred in the application that the appellant was the proprietor of the trade name "Chokhi Dhani" and was engaged amongst other activities, in the services of hospitality, entertainment, food and beverage services, amusement park, ethnic village, and such other services, for last more than 22 years and had successfully developed its image and market perception as an ethnic village of rural ambiance, art & culture. It was also averred that the appellant had started franchise format of business and had franchise outlets at Surat, Mumbai, Pune, Panchkula and Chennai besides Ahmadabad and self run outlets at Jaipur, Indore, Jaisalmer and Bangaluru. 4. It was further case of the appellant-applicant that the appellant (franchiser) had entered into one franchisee agreement with the respondent firm (franchisee) on 20.06.2008 for a period of 21 years with the lock-in period of 10 years, for operating and maintaining the franchise outlet within the territory of the city of Ahmadabad. As per the said agreement, the appellant had by way of permissive use, granted the respondent the right to use the said trade name "Chokhi Dhani" in relation to the services in accordance with the terms and conditions mentioned in the agreement. 5. It appears that thereafter certain disputes had arisen between the appellant and the respondent with regard to the operation of business under the agreement in question, and ultimately the respondent vide legal notice dated 04.12.2012 sent through its counsel, terminated the said franchisee agreement dated 20.06.2008, claiming damages to the tune of Rs.9.44 crores. The appellant also give the reply to the said notice through its counsel on 04.12.2012, calling upon the respondent to provide the daily sales reports for the period from 01.09.2012 to 31.12.2012 and pay the sum due under the various heads of clause 8 of the agreement, reserving its right to claim damages towards loss of goodwill and reputation. It appears that the respondent through another notice dated 10.01.2013 had invoked the arbitration agreement contained in the franchisee agreement and called upon the appellant to provide the consent on the names of the arbitrators suggested by the respondent. It appears that the respondent through another notice dated 10.01.2013 had invoked the arbitration agreement contained in the franchisee agreement and called upon the appellant to provide the consent on the names of the arbitrators suggested by the respondent. According to the appellant, since the respondent had continued the operation of Ahmadabad franchisee location in contravention of the terms and conditions of the agreement and was carrying on the operations prejudicial to their goodwill and prestige of "Chokhi Dhani", causing irreparable loss and injury to the appellant, the application under Section 9 of the said Act seeking various reliefs was filed before the court below. 6. The said application was resisted by the respondent by filing its reply, while admitting the execution of the franchisee agreement. It was contended interalia that the said agreement executed at Ahmadabad was for the period of 21 years, subject to the lock-in period of 10 years. It was also contended that the appellant had failed to discharge their obligations under the said agreement, which had compelled the respondent to terminate the agreement in question by giving the legal notice. According to the respondent, it had invested a huge amount for establishing and developing franchisee location at Ahmadabad, and had also paid huge amount of Rs.33 lacs to the appellant as franchise fees under the agreement. The respondent had also raised the objection as regards the jurisdiction of the court below in entertaining the application under Section 9 of the said Act on the ground that no cause of action or part of cause of action had arisen within the territorial jurisdiction of the court below. 7. The court below rejected the objection raised by the respondent as regards the jurisdiction, vide the order dated 15.02.2013, against which the respondent has preferred S.B.C.W.P. No.6958/2013. The court below also dismissed the application of the appellant filed under Section 9 of the said Act vide the order dated 07.03.2013, against which the Civil Misc. Appeal being No.1107/2013 has been filed. As stated earlier both have been admitted by the Court after hearing the learned counsels for the parties. 8. The learned senior counsel Mr. The court below also dismissed the application of the appellant filed under Section 9 of the said Act vide the order dated 07.03.2013, against which the Civil Misc. Appeal being No.1107/2013 has been filed. As stated earlier both have been admitted by the Court after hearing the learned counsels for the parties. 8. The learned senior counsel Mr. S. Kasliwal appearing for the appellant, pressing into service the various clauses of the franchise agreement and more particularly clause 37, submitted that the parties had agreed that only the courts in Jaipur would have the jurisdiction to entertain the proceedings related to the agreement. According to him, since the agreement itself was signed in Jaipur, as mentioned in the agreement itself and since the appellant had the registered office at Jaipur and since the obligations under the said agreement were to be discharged by the appellant from Jaipur, and since the daily reports were to be received from the respondent by the appellant at Jaipur and since the appellant had received the legal notice from the respondent terminating the agreement at Jaipur, the part of cause of action had arisen within territorial jurisdiction of the court below at Jaipur. Mr. Kasliwal relying upon the decisions of the Apex Court in cases of A.B.C. Laminart Pvt. Ltd. And Another v. A.P. Agencies, Salem, (1989) 2 SCC 163 ; Balaji Coke Industry Private Limited v. Maa Bhagwati Coke Gujarat Private Limited, (2009) 9 SCC 403 and in case of Rajasthan State Electricity Board v. Universal Petrol Chemicals Limited, (2009) 3 SCC 107 , submitted that when more than one court has jurisdiction, agreement to submit to one court, to the exclusion of the others is valid agreement and therefore the court below at Jaipur alone had the jurisdiction, as per clause 37 of the agreement. 9. As regards the grant of interim injunction as prayed for in the application, the learned counsel Mr. Kasliwal again referred to the various clauses of the agreement in question and submitted that the respondent could not be allowed to use the trade name of the franchiser i.e. "Chokhi Dhani" on the termination of the agreement, as per clause 29 of the said agreement. Kasliwal again referred to the various clauses of the agreement in question and submitted that the respondent could not be allowed to use the trade name of the franchiser i.e. "Chokhi Dhani" on the termination of the agreement, as per clause 29 of the said agreement. He further submitted that as per the said clause, the respondent also could not be permitted to involve itself in the same or similar village fair business or the business with similar ambiance, culture or trade name deceptively similar to the trade name of the appellant. According to Mr. Kasliwal, the appellant is the proprietor of the trade name "Chokhi Dhani" and is engaged in the services of hospitality, entertainment, food and beverage services, etc. since last more than 17 years and has earned a very good reputation and goodwill. He further submitted that the court below had thoroughly misinterpreted the provisions contained in the various clauses of the agreement, more particularly with regard to the payment of franchisee fee contained in clause 2 of the said agreement, for dismissing the application of the appellant. Placing heavy reliance on the various decisions of the Apex Court more particularly in case of Suresh Dhanuka v. Sunita Mohapatra, (2012) 1 SCC 578 , in case of T.V. Venugopal v. Vshodaya Enterprises Ltd. & Anr., 2011 (4) Supreme Court Cases 85 and in case of Gujrat Bottling Co. Ltd. & Others v. Coca Cola Co. & Others, (1995) 5 SCC 545 , Mr. Kasliwal submitted that the negative covenant in the agreement, if not in restrain of trade, would be enforceable and the interim injunction as prayed for could be granted to mitigate the risk of injustice to the appellant pending the appeal. The learned counsel has also relied upon many other decisions of the Apex Court on similar issues and prayed that the appellant would suffer an irreparable loss which could not be compensated in terms of money, if the injunction as prayed for is not granted. 10. However, the learned counsel Mr. Rajendra Prasad for the respondent vehemently submitted that no cause of action had arisen within the territorial jurisdiction of court below at Jaipur and merely because notice terminating the agreement was served upon the appellant at Jaipur, that would not confer jurisdiction upon the court below to entertain the proceedings arising out of the agreement in question. Rajendra Prasad for the respondent vehemently submitted that no cause of action had arisen within the territorial jurisdiction of court below at Jaipur and merely because notice terminating the agreement was served upon the appellant at Jaipur, that would not confer jurisdiction upon the court below to entertain the proceedings arising out of the agreement in question. Relying upon the decision of the Apex Court in case of State of Rajasthan & Ors. v. M/s Swaika Properties and Anr., AIR 1985 Supreme Court 1289 and in case of Rajasthan High Court Advocates Association v. Union of India & Ors., AIR 2001 Supreme Court 416 , Mr. Rajendra Prasad submitted that the expression cause of action is a bundle of facts and each fact would be necessary for the plaintiff to prove, if traversed in order to support his right. He also relied upon the decision of Apex Court in case of Modi Entertainment Network and Another v. W.S.G. Cricket Pte. Ltd, AIR 2003 Supreme Court 1177 , to contend that the parties by agreement cannot confer jurisdiction upon the court which otherwise would not have under the CPC. According to him, the court below had committed an error in assuming the jurisdiction and in deciding the application under Section 9 of the said Act. 11. Mr. Rajendra Prasad, further submitted that the appellant had not disclosed the material facts in its application under Section 9 of the said Act, in as much as the appellant had not disclosed the fact of pendency of the application filed by the respondent in the court at Ahmadabad under Section 9 of the said Act. He also referred to various clauses contained in the agreement in question to submit that the franchise fee to the tune of Rs.30 lacs was paid by the respondent to the appellant for using the trade name in the location allotted to the respondent for the entire tenure of the agreement i.e. for 21 years. He also referred to various clauses contained in the agreement in question to submit that the franchise fee to the tune of Rs.30 lacs was paid by the respondent to the appellant for using the trade name in the location allotted to the respondent for the entire tenure of the agreement i.e. for 21 years. According to him, even as per the clause 29, on the contravention of the agreement at the instance of the respondent before expiry of the lock-in period of 10 years, the appellant at the most would be entitled to the payment of royalty equivalent to the average of collected monthly royalty as a one time payment for the period of left for the lock-in period to cease, if the respondent was found to be the defaulter in the arbitration proceedings. He further submitted that there was nothing on record to suggest that the trade name "Chokhi Dhani" was registered under the Trade Marks Act, and therefore the appellant cannot have the exclusive right to use the said Trade name. The learned counsel also submitted that the defaults were committed by the appellant itself by not discharging its obligations as contained in the agreement, and therefore the respondent was compelled to terminate the agreement by serving a notice and claiming damages. The appellant cannot be allowed to get benefit of its own fault, runs the submissions of learned counsel Mr. Rajendra Prasad, and cause loss to the respondent, who had invested huge money for the establishment the franchise outlet at Ahmadabad with the name "Chokhi Dhani". He also relied upon the provisions contained in the Specific Relief Act to contend that the appellant is indirectly seeking the specific performance of the agreement which has already been terminated because of its own fault, and that no injunction could be granted to prevent the breach of contract, the performance of which could not be specifically enforced, as per Section 41(e) of the Specific Relief Act. 12. In the instant case it is not disputed that the appellant and the respondent had entered into the franchisee agreement dated 20.6.08 for operating and maintaining the franchisee outlet with the name 'Chokhi Dhani' within the location mentioned therein, in the city of Ahmadabad. 12. In the instant case it is not disputed that the appellant and the respondent had entered into the franchisee agreement dated 20.6.08 for operating and maintaining the franchisee outlet with the name 'Chokhi Dhani' within the location mentioned therein, in the city of Ahmadabad. It is also not disputed that on certain disputes having arisen between the parties, the respondent had terminated the said agreement by serving the legal notice dated 4.12.12 to the appellant. It appears that thereafter the respondent filed an application under Section 9 of the said Act in the court at Ahmadabad and the appellant filed the one in the court at Jaipur. So far as the objection of jurisdiction raised by the learned counsel Mr. Rajendra Prasad for the respondent is concerned, it would be necessary to reproduce Clause 37 of the said agreement which reads as under:- "37. Arbitration and Jurisdiction Arbitration Any dispute or difference whatsoever arising between the parties out of or relating to the construction, meaning, scope, operation or effect of this contract or the validity or the breach thereof shall be settled by arbitration in accordance with the Indian Arbitration and Conciliation Act, 1996 and the award made in pursuance thereof shall be binding on the parties. It is agreed by and between the parties that the venue of the Arbitration shall only be Jaipur. Jurisdiction The parties agree that only the Courts in Jaipur in the Republic of India shall have jurisdiction to entertain any proceedings related to this Agreement whether during pendency, or after expiry/termination. No other court shall have jurisdiction." 13. From the bare reading of the said clause it appears that both the parties had agreed that only the courts in Jaipur shall have the jurisdiction to entertain the proceedings which may arise out of the said agreement. It is settled proposition of law that when more than one court has jurisdiction, the parties by agreement may decide to submit to the jurisdiction of one court to the exclusion of the other court. It is also well settled principle of law that cause of action is a bundle of facts which taken with the law applicable to them gives the party a right to relief against the other party. It is also well settled principle of law that cause of action is a bundle of facts which taken with the law applicable to them gives the party a right to relief against the other party. As per Section 20 of the CPC, subject to the limitations contained in Section 16 to 19, the suit has to be instituted in the court within the local limits of whose jurisdiction, the defendant resides or carries on business or where the cause of action fully or in part arises. 14. So far as the facts of the present case are concerned, according to the respondent no cause of action had arisen within the local limits of the court below at Jaipur. It is submitted by the learned counsel Mr. Rajendra Prasad for the respondent that the agreement in question was not signed by the parties at Jaipur, as mentioned in the agreement, but was executed and signed at Ahmadabad. However, it is not disputed by him that the legal notice terminating the said agreement was served by the respondent to the appellant at Jaipur. Further, from the bare reading of the various clauses contained in the said agreement, it transpires that all the obligations of the appellant-franchiser were to be discharged from Jaipur, the supervision of the work of the respondent was to be done by the appellant from Jaipur, the daily reports were to be received by the appellant from the respondent at Jaipur, apart from the fact that the registered office of the appellant was also at Jaipur. Since the appellant had to provide all the knowhow, information, assistance and other intellectual property and to provide the expertise to run the day-today business including man power sourcing and development from Jaipur, which according to the respondent the appellant had failed to provide as per the agreement, it is required to be held that part of a cause of action had arisen within the jurisdiction of the court at Jaipur. The court, therefore, does not find any substance in the submission made by the learned counsel for the respondent that no cause of action had arisen within the local limits of the jurisdiction of the court below at Jaipur. The court, therefore, does not find any substance in the submission made by the learned counsel for the respondent that no cause of action had arisen within the local limits of the jurisdiction of the court below at Jaipur. It is true that by agreement, the parties cannot confer jurisdiction, where none exists on a court to which CPC applies However in the instant case, when more than one court had the jurisdiction and when the parties had agreed to submit to the exclusive jurisdiction of the courts at Jaipur, where the registered office of the appellant was situated and from where the appellant was obliged to provide the services to the respondent to run its day-to-day business, it could not be said that the parties had agreed to submit the jurisdiction to the court which otherwise did not have as per Section 20 of the CPC. In that view of the matter, the court is of the opinion that the court below had the jurisdiction to entertain the application made by the appellant seeking interim measures under Section 9 of the said Act. 15. So far as the merits of the case are concerned, it appears that one of the major considerations which weighed with the court below for dismissing the application of the appellant under Section 9 of the said Act was that the appellant had not disclosed the fact that prior to the appellant's filing the said application, the respondent had already filed one application under Section 9 of the said Act in the court at Ahmadabad, in which the appellant had also filed its appearance. It is axiomatic to say that the party seeking equitable relief must disclose all material facts and nondisclosure of the same may entail rejection of such relief. Therefore, this court also does not approve such conduct on the part of the appellant in not disclosing the fact about the pendency of the application before the Ahmadabad court, in the application filed by it before the Jaipur court, inasmuch as such non-disclosure might have resulted into passing of conflicting orders by two different courts creating unnecessary complications and multiplicity of proceedings. In any case, since the appellant was not benefited and since no adverse order against the respondent was passed ex-parte by the court below in the application filed by the appellant, no prejudice has been caused to the respondent and hence the matter is required to be examined on merits also. 16. Though the appellant had claimed various reliefs in the application under Section 9 and also in the present Civil Misc. Appeal, the interim relief sought is confined only for seeking temporary injunction for restraining the respondent from using the trade name/trade mark 'Chokhi Dhani', in any form and manner and from conducting any business or trade in the said name and from carrying on identical or similar services as rendered by the appellant. 17. It cannot be gainsaid that under Section 9 of the said Act, the party may apply for interim measures in respect of the matters contained therein, including the interim injunction as per Section 9(ii)(d). In order to appreciate the rival contentions raised by the learned counsels for the parties, certain clauses contained in the franchisee agreement entered into between the parties, require consideration. As per clause 2, the appellant franchiser had permitted the respondent franchisee, upon payment of Rs. 30 lacs, the franchise fee to use the franchiser trade name, i.e. 'Chokhi Dhani' in the territorial location as mentioned therein at Ahmadabad, for the purpose of agreement tenure. The franchise fee as defined in the operative provision contained in clause 1 meant as the fee payable by the franchisee to the franchiser other than royalty as per clause 2(i), the consideration at the time of appointment as franchisee of the franchise. Relying upon the said clause 2 of the agreement it was sought to be submitted by the learned counsel Mr. Rajendra Prasad that the respondent franchisee having made payment of Rs. 30 lacs by way of franchise fee to the appellant for using the trade name for the purpose of the agreement tenure which was for 21 years, the respondent had right to use the said trade name even after the termination of the agreement. The court does not find substance in the said submission of the learned counsel for the respondent, in view of the specific clause 29 pertaining to the effect of termination, contained in the said agreement. The court does not find substance in the said submission of the learned counsel for the respondent, in view of the specific clause 29 pertaining to the effect of termination, contained in the said agreement. The said clause 29 reads as under:- "Clause 29 Effect of Termination i Reversion of Goodwill of trade name (a) Upon the termination of this Agreement either by efflux or time of upon defaults or for any other reason, the Reputation and the Goodwill of trade name of the Franchiser, which was franchised to the Franchisee for the period of this Agreement, shall forthwith stand reverted to the Franchiser. The Franchisee acknowledges that the benefit obtained and accrued to it as a result of the licensing of the said Reputation and Goodwill of trade name shall constitute adequate consideration for such termination of agreement in favour of the Franchiser. (b) After termination for any reasons stated above including termination preponed by Franchisee against the provisions of the agreement, Franchisee shall not involve in the same, similar village fair business and of business with similar ambiance, culture, trade name/similar or deceptively similar trade name, layout decor and designs, intellectual property, copyright as that of Franchiser in future from the date of said termination. If after said termination., Franchisee is involved in such business, the franchiser shall have a right to restrain him from entering or continuing such business he has the right to take all legal actions-civil and criminal against him. (c) The lock in period of 10 years during which the franchisee shall continue as a Franchisee with the Franchiser as per the agreement. In case, the Franchisee intends to prepone the disassociation prior to the lock in period of 10 years, he shall have to indemnify the Franchiser by making a payment of royalty equivalent to average of collected monthly, royalty as a one time payment for the period left for the lock in period to cease. If the said payment is not made, then the Franchiser shall have right to recover this amount by operation of law. (d) upon termination of the agreement the Franchiser shall have sole discretion and right to offer franchise rights to any Franchisee in the same Franchise territory. The Franchisee who has been terminated will have no right or claim on the same. (d) upon termination of the agreement the Franchiser shall have sole discretion and right to offer franchise rights to any Franchisee in the same Franchise territory. The Franchisee who has been terminated will have no right or claim on the same. ii Non-Use of Trade Names The Franchisee shall not after termination of this agreement by lapse of time or upon default or for any other reason directly or indirectly identify itself in any manner as a Franchisee. In particular but without prejudice to the foregoing generality, the Franchisee shall not use any of the Franchiser's trade Names, Trade Names, Signs, Symbols, Designs, Devices, Insignia or other distinctive materials or any deceptively and confusingly similar Trade Names, Signs, Symbols, Designs, Symbols, Devices, Insignia or other distinctive materials. The Franchisee shall not, after termination of this Agreement, use nay Trade Secrets or other materials of the Franchiser." 18. It is specifically contained in the above stated clause that upon the termination of the agreement either by efflux of time or upon default or for any other reason, the reputation and the goodwill of the trade name of the franchiser shall forthwith stand reverted to the franchiser. The said clause also states that after the termination of the agreement, the franchisee shall not involve in the same or similar village fair business and of the business with the similar trade name, culture etc. The respondent having agreed to the said terms of the agreement, it does not lie in the mouth of the respondent to say that the respondent was entitled to use the said trade name even after the termination of the agreement. The court at this juncture is not required to go into the merits of the claim of damages made by both the parties against each other as to under what circumstances, the respondent had terminated the agreement and as to whether the appellant had committed any breach of the terms and conditions of the agreement as alleged by the respondent or not. Suffice is to say that admittedly the agreement has been terminated by the respondent by serving a legal notice upon the appellant and, therefore, the consequences of the termination as contained in the agreement would follow. The court also does not find substance in the submission of the learned counsel Mr. Suffice is to say that admittedly the agreement has been terminated by the respondent by serving a legal notice upon the appellant and, therefore, the consequences of the termination as contained in the agreement would follow. The court also does not find substance in the submission of the learned counsel Mr. Rajendra Prasad that the appellant at the most would be entitled to recover the royalty amount in case it is found that the respondent had dis-associated itself without any fault on the part of the appellant, before the lock-in period of 10 years as contained in clause 29(c) of the said agreement. When there is specific clause contained in the agreement to the effect that upon the termination of the agreement, the reputation and the goodwill of the trade name of the franchiser would stand reverted to the franchiser, the respondent could not be permitted to continue to use the said trade name upon the termination of the agreement. 19. It cannot be gainsaid that the interim measures sought under Section 9 of the said Act are similar in nature to the interlocutory or temporary injunctions granted by the courts under Order XXXIX Rule 1 and 2 of CPC and, therefore, the principles governing the grant of interlocutory injunction would also be applicable to the application for interim measure under Section 9 of the said Act. At this juncture, it would be appropriate to reproduce the observations made by the Apex Court with regard to the grant of interlocutory injunction pending legal proceedings, in the case of Gujarat Bottling Col Ltd. & Ors. v. Coca Cola Co. & Ors. (1995) 5 SCC, 545. Para 43 thereof reads as under:- "43. The grant of an interlocutory injunction during the pendency of legal proceedings is a matter requiring the exercise of discretion of the court. While exercising the discretion the court applies the following tests - (i) whether the plaintiff has a prima facie case; (ii) whether the balance of convenience is in favour of the plaintiff; and (iii) whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed. While exercising the discretion the court applies the following tests - (i) whether the plaintiff has a prima facie case; (ii) whether the balance of convenience is in favour of the plaintiff; and (iii) whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right assailed by the plaintiff and its alleged violation are both contested and uncertain and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the 'balance of convenience' lies." 20. Applying the aforesaid test to the facts of the present case the court is of the opinion that since the appellant has been using the trade name 'Chokhi Dhani' since last many years and has earned a goodwill and reputation all over India, and since it had permitted the respondent to use the said trade name, during the tenure of the agreement, which has come to an end, the appellant would suffer an irreparable loss which could not be compensated in terms of money, if the respondent is permitted to use the said trade name which may damage the goodwill and reputation of the appellant. It may incidentally be mentioned that the appellant-franchiser had based its claim under the Franchise agreement, in the application under Section 9 of the said Act, and not under the Trade Marks Act and therefore the court refrains itself from dealing with the issue as to whether the trade name or trade mark 'Chokhi Dhani' was registered under the said Act or not, and whether there was any infringement or passing off at the instance of the respondent or not. The rights of the parties under the agreement would be decided by the Arbitrators as and when they are appointed, however till then their rights need to be protected by way of granting interim measures under Section 9 of the said Act. 21. Though it was sought to be submitted by the learned counsel for the respondent that no injunction could be granted to prevent the alleged breach of the contract which could not be specifically performed, in view of Section 41(e) of the Specific Relief Act, the said submission cannot be accepted in view of Section 42 thereof, which permits enforcement of the negative covenant contained in the agreement notwithstanding the provision contained in Section 41(e). The learned counsel Mr. Kasliwal has rightly placed reliance upon the decision of the Apex Court in case of Suresh Dhanuka v. Sunita Mohapatra (supra) in this regard. 22. Since there was clause No.29 contained in the agreement specifying the effect of termination to the effect that the trade name 'Chokhi Dhani' permitted to be used by the respondent-Franchisee during the tenure of agreement, shall revert back to the appellant-Franchiser on the termination of the agreement, and that the respondent shall not carry on the business under the said trade name after the termination of the agreement, the respondent is required to be injuncted from using the said trade name 'Chokhi Dhani' for its business. 23. Though it was urged by the learned counsel Mr. Kasliwal for the appellant relying upon the said clause 29 to restrain the respondent from carrying on any business or provide the services similar to that of the appellant, the said submission cannot be accepted. 23. Though it was urged by the learned counsel Mr. Kasliwal for the appellant relying upon the said clause 29 to restrain the respondent from carrying on any business or provide the services similar to that of the appellant, the said submission cannot be accepted. The respondent could not be restrained from carrying on the business or from providing the services, as such clause would be contrary to Section 27 of the Contract Act, which states that every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Thus, Section 27 declares the agreement to be void, if such agreement restrains any person from exercising his right to carry on lawful business or profession or trade. 24. The court is, therefore, of the opinion that the interest of justice would be met if the respondent is restrained from using the trade name 'Chokhi Dhani' for conducting its business or trade at the location at Ahmadabad, which was permitted to be used under the franchisee agreement, pending the appeal. The other injunction sought by the appellant for restraining the respondent from carrying on the business or providing services similar to that of the appellant is hereby rejected. 25. In that view of the matter, the respondent is hereby restrained from using the trade name/trade mark 'Chokhi Dhani' for conducting its business or trade at the location at Ahmadabad, mentioned in the franchise agreement dated 20.6.08 pending the Civil Misc. Appeal. The application stands partly allowed accordingly.Petition allowed. *******