1936 (4) TMI 12 - HC - Indian Laws

Summary

Issues Involved:
1. Existence of an agreement for common management of Banaili Raj.
2. Validity and consideration of the agreement.
3. Termination of common management by the defendants.
4. Entitlement to relief and form of relief.

Detailed Analysis:

1. Existence of an Agreement for Common Management of Banaili Raj:
The court examined whether there was an agreement between the plaintiff and the defendants for the common management of Banaili Raj. The agreement dated September 1, 1928, was pivotal. The court found it impossible to conclude otherwise than that there was such an agreement. The indenture of September 1, 1928, explicitly stated that the parties considered it desirable and advantageous that the estate's management should be carried on by a joint manager to secure the benefits of common management. The court held that the parties agreed to have the property managed by a common manager for the period up to Bhado 1347 (1940).

2. Validity and Consideration of the Agreement:
The defendants argued that even if there was an agreement, it was not a binding contract due to a lack of consideration. The court found that the parties gave up their right to manage their respective interests separately, which constituted sufficient consideration. Additionally, the lease agreement of October 12, 1928, where the parties jointly became liable for a rental of Rs. 2,30,000, was part of the consideration for the agreement of September 1928.

3. Termination of Common Management by the Defendants:
The court examined whether the common management was brought to an end by the defendants' actions. The defendants attempted to dissolve the common management by dispensing with the services of Mr. Daunt, the common manager. The court found that the agreement did not depend on the employment of Mr. Daunt alone; the common management was intended to continue regardless of the individual manager. The court leaned towards the opinion that any differences regarding the management should be referred to the Commissioner of Bhagalpur, as per the agreement.

4. Entitlement to Relief and Form of Relief:
The court addressed whether the plaintiff was entitled to an injunction to prevent the defendants from breaking the common management. Section 56, Clause (f) of the Specific Relief Act was considered, which states that an injunction cannot be granted to prevent the breach of a contract that cannot be specifically enforced. However, Section 57 provides that an injunction can be granted to perform a negative agreement even if the affirmative agreement cannot be specifically enforced. The court concluded that the agreement, while affirmative in form, was negative in substance, as it involved the parties agreeing not to do what they ordinarily had the right to do (manage their shares separately). Therefore, the plaintiff was entitled to an injunction.

Judgment:
The court granted a perpetual injunction restraining the defendants from interfering with the common management of Banaili Raj. The plaintiff was entitled to a declaration that the defendants could not break the agreement of September 1, 1928, and was awarded the costs of the action. The hearing fee was fixed at 50 gold mohurs. The court did not make a declaration as claimed in sub-para 3 of para. 31 of the plaint, as it was incidental to the main question.