1. ' MRS. QAISER IQBAL, J.---Suits Nos.127 and 128 of 2008 have arisen out of similar facts. In Suit No,127 of 2008, CMA No, 653 of 2008 under Order XXXIX, Rules 1 and 2, C.P.C. Moved by the plaintiff, seeking declaration that the Agency coupled with interest in the agreement dated 11-2-1996 and the impugned letter of termination is of no legal effect, the agreement is still in force upon the parties.
2. Plaintiffs have also sought prohibitory injunction seeking to restrain the defendants from giving effect to the termination of letter, alternatively, sum of Rs,200 Million were claimed as damages, whereas in Suit No, 128 of 2008, C.M.A. No,654 of 2008 an application under Order XXXIX, Rules 1 and 2, C.P.C. Preferred by the plaintiffs seeking an order of restraint against the defendants from appointing anyone else as against of the defendant No,1 in Pakistan for conferring benefit, or interest in derogation of the exclusive agreement dated 1-1-2000 in favour of the plaintiffs.
3. ' Dr. Muhammad Farogh Naseem, learned counsel for the plaintiff has vehemently argued on two fold grounds, (1) relationship between the parties are that of principal agent, and (2) agency being coupled with interest was not revocable under section 202 of the Contract Act.
4. ' The above arguments were refuted by Messrs Rehman Aziz Malik and Shakeel Pervez learned counsel for the defendants, contended that the plaintiff and the defendant No,1 were governed with the status of principal of agent upon termination of the agency the defendant No,1 was justified in extending benefit of the defendant No,2 by entering into a fresh agency agreement whereby the defendant No,2 has been appointed agent of principal for running business.
5. ' In support of the first contention, learned counsel for the plaintiff has referred to the provisions of agreement executed in the year, 1982 and in the year, 1996 to demonstrate that the agency was coupled with interest. There is no cavil to the proposition that two agreements prima facie suggest that the plaintiff was agent of the defendant No,1, the question remains for determination is whether section 202 of the Contract Act would be attracted on account of investment of million of rupees in setting up the office and other ancillaries such an appointment of staff, sale and marketing business to the consumers as well as large clientele in the country all of which have been routed towards the defendant No, 1.
6. ' In support of the above, learned counsel for the plaintiff has relied upon the case of Muhammad Aref Effendi v. Egypt Air 1980 SCMR 588, whereby Honourable Supreme Court of Pakistan granted interim injunction in favour of the agent and ordered that the business should continue under the terms of the contract. In support of the contentions that the agency was coupled with interest, reliance has been placed on the following cases:--
(1) Abdul Habib Rajwani v. Messrs Brothers Industries Ltd. 2007 YLR 590.
(2) Messrs Travel Automation (Pvt.) Ltd. v. Abacus International (Pvt.) Limited 2006 CLD 497.
(3) Roomi Enterprises (Pvt.) Limited v. Stafford Miller Limited and others 2005 CLD 1805.
(4) Messrs Time N Visions International (Pvt.) Limited v. Dubai Islamic Bank Pakistan Limited 2007 CLD 762.
(5) Messrs Farooq and Co., v. Federation of Pakistan and others 1996 CLD 2030.
(6) Zubair Ahmed v. Pakistan State Oil Co. Limited and others PLD 1987 Karachi 112.
(7) Muhammad Aref Effendi v. Egypt Air 1980 SCMR 588.
(8) Muhammad Ibrahim v. Small Business Finance Corporation 2002 CLD 176.
(9) Messrs Business Computing International (Pvt.) Limited v. IBM World Trade Corporation 1997 CLC 1903.
7. (10)Pakistan Automobile Corporation Limited and others v. General Motors Overseas Distribution Corporation and others PLD 1982 Karachi 796.
8. (11)Huma Enterprises v. Syed Pir Ali Shah and others 1985 CLC 1522.
9. (12)Messrs Universal Trading Corporation (Pvt.) Limited v. Messrs Beecham Group PIC and others 1994 CLC 726.
10. (13)Bolan Beverages (Pvt.) Limited v. Pepsi Co., Inc. And others PLD 2004 SC 860.
11. (14)Messrs World Wide Trading Co., v. Sanyo Electric Trading Co., Limited and others PLD 1986 Karachi 234.
12. (15)Muhammad Riaz v. Federal Construction Corporation Limited and others 1987 CLC Karachi 345.
13. (16)Messrs Universal Business Equipment (Pvt.) Limited v. Messrs Kokusai Commerce Inc. And others 1995 MLD 384.
14. (17)Talani Vanna and others v. Krishnaswami Konar and others AIR 1946 Mad.9.
15. (18)Muhammad Farooq and Co., (Pvt.) Limited v. Messrs Pakistan Tobacco Co., Limited and others 1997 CLC 520.
16. (19)Syed Shafique Hussain v. Syed Abdul Qasim PLD 1979 Karachi 22.
17. (20)Messrs Caltex Oil Pakistan Limited v. Sheikh Rahan uddin PLD 1958 Lahore 63.
(21) Sardar Muhammad Nawaz v. Mst. Firdous Begum 2008 SCMR 404.
(22) Muhammad and 9 others v. Hashim All PLD 2003 SC 271.
(23) Mst. Salma Javed and others v. S. M. Arshad and others PLD 1983 Karachi 303.
(24) Balagarnwala Oils Mills v. Shakarchi Trading AG and others PLD 1990 Karachi 1.
(25) Molasses Export Co., Limited v. Consolidated Sugar Mills Limited 1990 CLC 609.
(26) Marghub Siddiqui v. Hamid Ahmed Khan and others 1974 SCMR 519.
(27) Rehman Khan and others v. Mst. Safia Begum 2002 YLR 3120.
(28) Syed Mahmood All Gardezi v. Syeda Rabia Begum and others 1993 MLD 814.
18. ' Much of the emphasis has been laid under section 142 of the Sale of Goods Act, the basic ingredients of the contract of the Agency are:--
(1) Agent has a power on behalf of the principal to deal with third persons so as to bind the principal.
(2) The subject matter of the agency has to be dealt with the property of the principal and not that of the agent.
(3) The agents act as intermediary for consideration; and
(4) The liability of the agent is always to account for the sale proceeds to the principal.
19. ' Learned counsel for the defendant No,1 has relied upon the case of Pakistan Paper Corporation Ltd PPC. v. National Trading Company N.T.C. 1983 CLC Lahore: 1969 and after reviewing the judicial precedents, the basic ingredients of the contract of the agency were laid down which was concluded that in the facts and the circumstances of the case the NTC had prima facie case against the PPL for grant of temporary injunction and the temporary injunction issued through the impugned order by the learned Court below, was for maintenance of the status quo.
20. ' Learned counsel for the plaintiff has contended that for the purposes of seeking injunction, the plaintiff has to make out a prima facie case and the balance of convenience is in his favour in the event of refusal of grant of injunction by the Court irreparable loss shall be sustained by the plaintiff.
21. ' A prima facie case was interpreted by a Division Bench of this Court in the case of Muhammad Matin v. Mrs. Dino Manekji Chinoy PLD 1983 Karachi 387, following the case of Sui Gas Transmission Company v. Sui Gas Employees' Union 1977 SCMR 220 connoting that the prima facie case would be spelled out when a series of questions of law or facts was raised in the plaint on which parties have to go to try. This view was also taken in the case of S.N.Gupta and Co. v. Sadananda Ghosh PLD 1960 Dacca 153, followed by the learned Single Judge in the case of Muhammad Yousuf v.
22. Messrs Urooj Private Limited PLD 2003 Karachi 16.
23. ' Learned counsel for the plaintiff maintained that the agency is coupled with interest to substantiate his contentions referred to the correspondence annexed along with the plaint, prima facie establish that the factum of agency is coupled with interest.
24. ' Learned counsel for the defendants have contended that under the agreement dated 1-12-1996, the prayer sought cannot be granted as it falls within the ambit of the contract, which cannot be specifically enforced under section 21 of the Specific Relief Act. So far as the prima facie case is concerned, it is stressed that under sections 201, 205 and 206 of the Contract Act, the defendant No,1 was required to serve a reasonable notice for termination of the agency, which is not in violation of the terms of the contract, as held in the case of Messrs Farooq and Co. v. Federation of Pakistan 1996 CLC 2030 and Sunshine Corporation (Pvt.) Limited v. V.E.I. Du Pont 1999 YLR 2162. It is next urged that agency can be said to be coupled with interest when the authority of an agent is given for effectuating a security or of securing an interest of the agent. Termination letter makes reference to the parties to the agreement dated 1-12-1996, therefore, rights shall be governed by the contract under "Expressum facit cessare taciturn" meaning thereby when a deed and statute contains express covenants or specific mention of things and contingencies, no implication of any covenant or contingencies on the same subject matter can be raised, the Court can only read the existing covenants. The rights of the parties shall be governed according to the terms laid down in the agreement and not beyond the scope at all. In this context reliance has been placed upon the case of Messrs Nasir Traders v. Habib Bank Limited Quetta PLD, 1993 Quetta 94 and Mst. Azeemun Nisa Begum v. All Muhammad PLD 1990 SC 382.
25. ' Much stress has been laid by the learned counsel for the plaintiff that factum of establishing an agency coupled with interest on the basis of special equities, plaintiffs claim perpetuity on exclusivity financial ouster, anti-competition, establishment of good will, satisfactory performance of the agent and heavy expenditure of substantial investment in the business of agency.
26. ' While from the other side relying on the case reported in Abdul Habib Rajwani v. Messrs Brothers Industries Limited 2007 YLR 590 (Karachi), it is urged that the above practice does not constitute a pre-existing interest for applicability of section 202 of the Contract Act.
27. ' Much of the emphasize has been laid by the learned counsel for the plaintiff in the case of Muhammad Aref Effendi v. Egypt AIR 1980 SCMR 588, the applicability to the present case being binding precedents in terms of Article 189 of the Constitution of the Islamic Republic of Pakistan, 1973 which was considered in case of Messrs World Wide Trading Ca. v. Sanyo Electric Trading Co.
28. Ltd PLD 1986 Karachi 234, Philippine Airlines Inc. v. Paramount Aviation (Pvt.) Limited PLD 1999 Karachi 227, Messrs Time N Visions International (Pvt.) Limited v. Dubai Islamic Bank Pakistan Limited PLD 2007 Karachi 278 and Abdul Habib Rajwani v. Messrs Brothers Industries Limited 2007 YLR 590.
29. ' Learned counsel for the defendants have contended that there is no conflicted between the cases of Bolan Beverages (Pvt.) Limited v. Pepsico Inc. PLD 2005 SC. 349 and the Egypt Air case supra. In the Bolan Beverages case, it has been held that any expenditure in setting up the office and necessary infrastructure for carrying on business of agency does not tantamount creating interest in the subject matter. The agreement contained a termination clause, which has been acted upon by the defendant No,2, in the absence of permanent injunction prayed for, a temporary injunction cannot be granted, as held in the case of Marghub Siddiqi v. Hamid Ahmed Khan 1974 SCMR 519, Messrs Petrocommodities (Pvt.) Limited v. Rice Export Corporation of Pakistan PLD 1998 Karachi 1, Zahid Hussain v. Government of Sindh 1992 CLC 2396 and Messrs Pakistan Associated Construction Limited v. Asif H. Kazi 1986 SCMR 820.
30. ' Mr. Shakeel Pervez Bhatti, learned counsel for the defendant No,2 contended that the plaintiff has sought restraint order against the defendant No,1 whereas the principal has appointed the defendant No,2 as agent under the agreement of agency dated 21-1-2008 well before filing of the suit, which was within the knowledge of the plaintiff as is vouchsafe from e-mail dated 1-2-2008, the plaintiff has concealed this factum for obtaining an interim injunction pursuant thereto the Defendant No,2 has made substantial investment for establishing necessary infrastructure and suffering huge losses.
31. ' It is next urged that the balance of convenience lies in favour of the defendants as the agreement executed between them stands over a period of three years that cannot be specifically enforced under section 21 (g), therefore, interim injunction cannot be granted as held in the case of Hameedull v. Headmistress 1997 SCMR 855 and Philippine Airlines Inc. v. Paramount Aviation (Pvt.)
32. Limited PLD 1999 Karachi 227.
33. ' Much stress has been laid on the arguments that the plaintiff has prayed for grant of damages in the alternative temporary injunction cannot be granted in such circumstances as laid down in the case of Puri Terminal Limited v. Government of Pakistan 2004 SCMR 1092 and the Bolan Beverages case supra.
34. ' The questions which requires determination at this stage as to whether the interest of agent forming the subject matter of agency was adverse in nature to that of principal according to the scope of section 202 and the agency could continue by the said power coupled with interest were authority of agent is given for the purpose of effectuating security or to secure interest of the agent.
35. In the instant case, the interest of an agent is commission or remuneration, which cannot be said A to be interest in the property itself. Admittedly, upon revocation of agency, the only question left over for determination at this stage would be about the agency agreement executed between the defendant.
36. ' A comparison of agency agreement dated 1-11-1982 and the agency agreement dated 1-12-1996, does not reveal a marked difference. Although in the first agency agreement does not contain provisions with regard to incurrence of expenditures by the plaintiffs whereas subsequent agreement contains Clauses 2.01,2.02 did not preclude the plaintiffs from acting as an agent to any other person, except the defendant No,
1. So far as Clauses 2.03, 2.04, 2.05 and 3 prescribes in detail the marketing and sales obligation upon the plaintiffs whereas Clauses 4,5,7 prescribes principal's duties whereas under Clause 7.05 the defendant No,1 had undertaken not to appoint any other person as agent without approval of the plaintiffs.
37. ' The impugned termination notice of the defendant No,1 is attracted under section 202 of the Contract Act, as the agency is terminable through a notice, therefore, it will be construed to be an agency for fixed time, as held in the case of Messrs Travel Automation (Pvt.) V. Abacus International (Pvt.) Limited 2006 CLD 497. In the case of Messrs Business Computing International (Pvt.) Limited supra, it was held that no heard and fast rules can be laid down to specific consideration for grant of refusal of injunction in such cases. Each and every case is to be decided on its own merits, in case where special equities were found to exist in favour of the plaintiffs, temporary injunction ought to be issued. In the present case, heavy expenditure is alleged to be incurred by the plaintiffs as consequence of the agreement of the year, 1996 would not warrant a grant of injunction as the plaintiffs have resorted to claim damages as alternative relief by way of damages.
38. ' The next contention raised on behalf of the defendants is that as per Clause 9 of the agreement for termination of contract, 90 days' notice was required to be served, which has been negated on behalf of the plaintiffs, on the basis of dictum laid down in the case of Hazara Hill Tract Improvement Trust v. Mst. Qaisra Elahi and others 2005 SCMR 678. There is ample evidence on record to suggest that prior to filing of the suit, the plaintiffs had knowledge about appointment of the defendant No,2 as an agent by the defendant No,1 as the agreement was terminated on 17-12- 2007.
39. I am conscious of the fact that no hard and fast rules can be laid down for specific consideration for grant or refusal of injunction in such cases. Each and every case is to be decided on its own merits. Normally compensation in money is considered adequate remedy for illegal termination of the agency. In the present case, the plaintiff had prayed for quantum of damages in such circumstances the plaintiffs are not entitled to interim injunction. Having regards of the above facts and circumstances; .C.M.As. Nos. 653 and 654 of 2008 hereby stand dismissed, interim order earlier passed, hereby stands recalled.