Negative covenant in an expired fixed-term contract could not be enforced by interim injunction under the Specific Relief Act.

A fixed-term commercial arrangement was treated as having prima facie expired by efflux of time, so the negative covenant could not be enforced independently once the contract had ceased to subsist. Section 42 of the Specific Relief Act, 1963 was considered conditional on a binding contract and the claimant's own performance, while the arrangement was also regarded as determinable, engaging the bar under Section 14(1)(c) and the related restriction under Section 41(e). On balance of convenience and irreparable injury, the court found the respondent's position stronger and refused interim injunctive relief.

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Issues: Whether interim injunctive relief could be granted to enforce the negative covenant and restrain the respondent from entering into third-party arrangements after the contractual arrangement had prima facie expired by efflux of time.

Analysis: The contractual arrangement was held to be for a fixed term and, on a prima facie view, had come to an end on expiry of the amended commercial terms. Once the underlying contract had ceased to subsist, the negative covenant could not be enforced independently. Section 42 of the Specific Relief Act, 1963 was held to be conditional upon the contract still being binding and upon the claimant's own performance of its obligations. The arrangement was also treated as determinable in nature, attracting the bar under Section 14(1)(c) and the consequential restriction under Section 41(e) of the Specific Relief Act, 1963. The balance of convenience and the risk of irreparable injury were found to favour the respondent rather than the appellant.

Conclusion: Interim injunction was refused and interference with the arbitral tribunal's order was declined.

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