Law with respect to the grant of injunction in commercial contracts

The law with respect to the grant of injunction in commercial contracts is well settled. Section 14(1)(c) bars the specific performance of contracts in respect of which the compensation in money is an adequate relief for their non-performance. Section 14(1)(c) bars the specific performance of contracts which are determinable in nature. Section 41(e) of the Specific Relief Act provides that no injunction can be granted in respect of the contracts which cannot be specifically enforced.

However, Section 42 of the Specific Relief Act empowers the Court to grant an injunction in respect of a negative agreement provided that the plaintiff has not failed to perform his obligation under the contract. The relevant provisions of the Specific Relief Act, 1963 are reproduced hereunder:-

# “Section 14. Contracts not specifically enforceable.-

(1) The following contracts cannot be specifically enforced, namely:–

(a) a contract for the non-performance of which compensation in money is an adequate relief;

xxx xxx xxx

(c) a contract which is in its nature determinable;

# Section 41. Injunction when refused. –

An injunction cannot be granted xxx xxx xxx

(e) to prevent the breach of a contract the performance of which would not be specifically enforced;

# Section 42. Injunction to perform negative agreement.-

Notwithstanding anything contained in clause (e) of section 41, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement:-

Provided that the plaintiff has not failed to perform the contract so far as it is binding on him.”

{The above discussion on Injunction is quoted from a recent judgment in Swift Initiative Pvt. Ltd. Vs. Dilip Chhabria Design Pvt. Ltd. [Delhi High Court, 19 Oct 2015]

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