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Granting Injunction For Interference With Contractual Relations of Two Parties In Absence of Law Would Violate Art 19(5) of Constitution: Delhi HC [Read Order]

Karan Tripathi
18 May 2020 12:46 PM GMT
Granting Injunction For Interference With Contractual Relations of Two Parties In Absence of Law Would Violate Art 19(5) of Constitution: Delhi HC [Read Order]
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Delhi High Court has held that providing injunction for alleged interference with contractual relations of two parties, in absence of any law, would violate the fundamental right of carrying out trade under Article 19(5) of the Constitution.

The order has been passed by the Single Bench of Justice Rajiv Sahai Endlaw in a case where INOX Ltd had asked the court to injunct PVR Cinemas from dealing with third parties with whom INOX was in a process of developing contractual relations.

The Plaintiff had submitted that it had binding contracts with the developer/owner of the properties at Amritsar and Juhu, Mumbai and which contracts were breached/broken or are threatened to breached/broken, by the developer/owner of the said properties, at the instance of the defendant.

Therefore, the Plaintiff had sought court's directions for restraining the Defendant from doing so and also from doing so with respect to other properties with respect whereto the plaintiff has existing contracts or may have contracts in future.

The Defendant, on the other hand, argued that the plaintiff and the defendant are perhaps the only two major players in the country with respect to the business of multiplexes.

Therefore, the Defendant argued, the relief as claimed is designed to not only drive the Defendant out of competition but also to the prejudice of owners of certain kinds of properties of which the Plaintiff and the Defendant are the only dominant consumers in the country and who on grant of injunction as sought by the Plaintiff would be left with no option but to deal with their respective properties with the plaintiff only, enabling the Plaintiff to beat down the prices.

Observations of the Court

The court noted that the grant of injunction claimed by the Plaintiff on the premise of the actions of the Defendant comprising a tortious act of interference with contractual relations of the Plaintiff, would be in violation of the fundamental right of the Defendant, its promoters and directors to carry on trade and business, without any law having been enacted by the State in this respect in the interest of general public, within the meaning of Article 19 (5) of the Constitution of India.

Therefore, the court held that averments contained in the plaint, had no cause of action for the relief claimed against the defendant and the relief claimed by the plaintiff against the defendant is barred by law.

In addition to this, the court also imposed costs of ₹5,00,000 which has to be paid to the Defendant within 90 days.

Click Here To Download Order

[Read Order]

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