1. ' MRS. QAISER IQBAL, J.-Suits Nos. 127 and 128 of 2008 have arisen out of similar facts. In Suit No, 127 of 2008, C.M.A. 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 1-12-1996 hnd 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, a 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 & 2 C.P.C, preferred by the plaintiff seeking an order of restraint against the defendants from appointing anyone else as against of the defendant No,l in Pakistan for conferring benefit, or interest in derogation of the exclusive agreement dated- 1-1-2000 in favour of the plaintiff^.
3. ' Dr. Muhammad Farogh Naseem, leamed counsel for the plaintiff has vehemently argued on two fold grounds, (1) relationship between the parties is that of principal and 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 Pervaiz leamed 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,l 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 then 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,l, 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 a appointment of staff, sale and marketing business to the consumers as well as large clientele in the country all of which has been routed towards the defendant No,l.
6. ' In support of the above, leamed 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.) Ltd. (2006 CLD 497).
(3) Roomi Enterprises (Pvt.) Ltd. v. Stafford Miller Limited and others / (2005 CLD 1805).
(4) Messrs Time N Visions International (Pvt.) Ltd. v. Dubai Islamic Bank Pakistan Limited (2007 CLD 762).
(5) Messrs. Farooq & Co. v. Federation of Pakistan and others (1996 CLC 2030).
(6) Zubair Ahmed v. Pakistan State Oil Co. Ltd. And others (PLD 1987 Karachi 112).
(7) Muhammad Aref Effendi v. Egypt Air (1980 SCMR 588).
(8) Muhanunad Ibrahim v. Small Business Finance Corporation (2002 CLD 176).
(9) Messrs Business Computing International (Pvt.) Ltd. v. IBM World Trade Corporation (1997 CLC 1903).
(10) Pakistan Automobile Corporation Limited and others v. General Motors Overseas Distribution Corporation and Others (PLD 1982 Karachi 796).
(11) Huma Enterprises v. Syed Pir Ali Shah and others (1985 CLC 1522).
(12) Messrs Universal Trading Corporation (Pvt.) Limited v. Messrs Beecham Group PIC and others (1994 CLC 726).
(13) Bolan Engineering (Pvt.) Limited V. Pepsi Co, Inc and others (PLD 2004 SC 860).
(14) Messrs. World Wide Trading Co., V. Sanyo Electric Trading Co., Limited and others (PLD 1986 Karachi 234).
(15) Muhammad Riaz v. Federal Construction Corporation Limited and others (1987 CLC Karachi 345) .
(16) Messrs Universal Business Equipment (Pvt...) Limited v. Messrs Kokusai Commerce Inc. And others (1995 MLD 384).
(17) Talani Vannan & others v. Krishnaswami Konar and others (AIR 1946 Mad. 9).
(18) Muhammad Farooq & Co. (Pvt.) Limited v. Messrs Pakistan Tobacco Co., Limited and others (1997 CLC 520).
(19) Syed Shafique Hussain v. Syed Abdul Qasim (PLD 1979 Karachi 22).
(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 & 9 others v. Hashim Ali (PLD 2003 SC 271).
(23) Mst. Salma Javed and others v. S. M. Arshad and others (PLD 1983 Karachi 303).
(24) Balagomwala 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 Siddiqul v. Hamid Ahmed Khan and others (1947 SCMR 519).
(27) Rehman Khan and others v. Mst. Safia Begum (2002 YLR 3120).
(28) Syed Mahmood Ali Gardezi v. Syeda Rabia Begum and others (1993 MLD 814).
7. '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 safe proceeds to the principal.
8. ' Learned counsel for the defendant No,l has relied upon the case of Pakistan Paper Corporation Ltd.
9. (P.P.C.) 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 counsel Court below, was for maintenance of the status quo.
10. ' 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 injunction by the Court irreparable loss shall be sustained by the plaintiff.
11. ' 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 SGMR 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. & Co. v.
12. Sadananda Ghosh (PLD 1960 Dacca 153), followed by the learned Single Judge in the ease of Muhammad Yousuf v. Messrs Urooj (Private) Limited (PLD 2003 Karachi I6).
13. ' 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.
14. ' 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 catmot 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,l 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 & 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 cessate tectium" meaning thereby when a deed and statute contains express covenant 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 covenant. 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 contq^t 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. Ali Muhammad (PLD 1990 SC 382).
15. ' Much stress has been laid by the leamed 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.
16. ' While from the other side relying on the case reported in 2007 YLR 590 (Karachi) (Abdul Habib Rajwani v. Messrs. Brothers Industries Limited), it is urged that the above practice does not constitute a pre-existing interest of applicability of section 202 of the Contract Act.
17. ' 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 the case of Messrs World Wide Trading Co. V. Sanyo Electric Trading Co. Ltd. (PLD 1986 Karachi 234), Philippine Airlines Inc, v. Paramount Aviation (Private) 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).
18. ' Leamed counsel for the defendants have contended that there is no conflict between the case of Bolan Beverages (Pvt.) Limited v. PepsiCo Inc. PLD 2004 SC 860 = 2004 CLD 1530 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 infrastmcture 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 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 Karachi 1), Zahid Hussain v. Government of Sindh (1992 CLC 2396) and Messrs Pakistan Associated Constmction Limited v. Asif H. Kazi (1986 SCMR 820).
19. 'Mr. Shakeel Pervaiz Bhatti, learned counsel for the defendant No,2 contended that the plaintiff has sought restraint order against the defendant No,l 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 infrastmcture and suffering huge losses. ' lt 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 B cannot be specifically enforced under section 21 (g), therefore, interim injunction cannot be granted as held in the case of Hameedull v. Headmistress (1997 SGMR 855) and Philippine Airlines Inc. v. Paramount Aviation (Private) Limited (PLD 1999 Karachi 227).
20. ' Much stress has been laid bn 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 SGMR 1092) and the Bolan Beverages case (supra).
21. ' 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 where authority of agent is given for the purpose of effectuating security or to secure interest of the agent.
22. In the instant case, the interest of an agent is commission or remuneration, which cannot be said 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.
23. ' 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 plaintiff whereas subsequent agreement contains Glauses 2.01, 2.02 did not preclude the plaintiffs from acting as an agent to any other person, except the defendant No,l. So far as Glauses 2.03, 2.04, 2.05 and 3 prescribes in detail the marketing and sales obligation upon the plaintiff whereas Glauses 4,5,7 prescribes principal's duties whereas under Glauses the defendant No,l had undertaken not to appoint any other person as agent without approval of the plaintiffs.
24. ' The impugned termination notice of the defendant No, 1 is attracted under section 202 of the Gontract Act, as the agency is terminable a notice, therefore, it will be construed to be an agency for fixed time, as held in the base of Messrs Travel Automation (Pvt.) Ltd. v. Abacus International (Pvt...) Limited (2006 GLD 497). In the case of Messrs. Business Gomputing International (Pvt.)
25. Limited (supra), it was held that no hard and fast rules can be laid down to specific consideration for grant or 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 plaintiff, temporary injunction ought to be issued. In the present case, heavy expenditure is alleged to be incurred by the plaintiff 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.
26. ' The next contention raised on behalf of the defendants is that as per Glause 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)
27. Improvement Trust v. Mst. Qaisra Elahi and anothers (2005 SGMR 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,l as the agreement was terminated on 17-12- 2007.
28. ' I am conscious of the fact that no hard and fast rules can be laid down specific consideration for grant or refusal of injunction in such cases. Each and every case is to be decided on its own merits.
29. Normally compensation in money is considered adequate remedy for illegal termination of the agency. In the present case, the plaintiff has prayed for quantum of damages in such circumstances the plaintiffs are not entitled to interim injunction. Having regards of the above facts and circumstances, CMA Nos. 653 and 634 of 2008 hereby stand dismissed, interim order earlier passed, hereby stands recalled. .
30. ' On the request of the plaintiff's counsel operation of impugned order is suspended for three days.