Negative covenant in a contract can be enforced by injunction despite assessable damages, where prima facie contractual rights are shown.

A manager's authority to bind the company was established prima facie from earlier written authorisation, and no prior revocation was shown. An express negative covenant in the contract was enforceable by injunction under Section 42 of the Specific Relief Act, 1963, and the mere fact that loss could be monetarily assessed did not bar relief. The balance of convenience supported interlocutory protection because continued breach would defeat the plaintiff's contractual restraint before trial. A later letter was treated as continuing, not superseding, the earlier arrangement. The interlocutory injunction was therefore properly granted and confirmed.

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Issues: (i) Whether the defendant's manager had authority to execute the contract binding the defendant company; (ii) Whether damages were an adequate remedy so as to bar injunction to enforce the negative covenant; (iii) Whether the balance of convenience favoured grant of an interlocutory injunction; (iv) Whether the later letter of March 8, 1968 superseded or terminated the subsisting arrangement.

Issue (i): Whether the defendant's manager had authority to execute the contract binding the defendant company.

Analysis: The authority of the manager was supported prima facie by the earlier letter stating that he alone could sign booking slips and contracts on behalf of the company. The defendant did not show that this authority had been revoked before his death. On the materials placed, the plaintiff established a prima facie case that the manager was authorised to execute the contract.

Conclusion: The issue was decided in favour of the petitioner.

Issue (ii): Whether damages were an adequate remedy so as to bar injunction to enforce the negative covenant.

Analysis: The contract contained an express negative covenant restraining exhibition of films supplied by others. In such a case, Section 42 of the Specific Relief Act, 1963 permits enforcement of the negative bargain by injunction notwithstanding inability to compel specific performance of the affirmative part. The circumstance that loss may be capable of monetary assessment does not, by itself, bar relief where the suit is to enforce a negative covenant.

Conclusion: The issue was decided in favour of the petitioner.

Issue (iii): Whether the balance of convenience favoured grant of an interlocutory injunction.

Analysis: The injunction was sought as a step in aid of the final relief and to prevent the agreement from becoming infructuous before trial. The defendant's continued breach would defeat the plaintiff's claimed right to final injunctive relief, while the plaintiff faced loss of business and exposure to breaches of its own commitments. The balance of convenience was therefore in favour of protection of the plaintiff's prima facie contractual right.

Conclusion: The issue was decided in favour of the petitioner.

Issue (iv): Whether the later letter of March 8, 1968 superseded or terminated the subsisting arrangement.

Analysis: The later letter was read as being in continuation of the earlier communication and as referring back to the existing arrangement between the parties. On the face of the record, it did not establish a fresh terminable contract overriding the agreement relied upon by the plaintiff.

Conclusion: The issue was decided in favour of the petitioner.

Final Conclusion: The plaintiff established a prima facie enforceable negative covenant and the interlocutory injunction was properly granted and confirmed.

Ratio Decidendi: A contract containing an express negative covenant may be enforced by injunction under Section 42 of the Specific Relief Act, 1963, and the availability of assessable damages does not by itself defeat relief where the injunction is sought to preserve the contractual restraint and the plaintiff shows a prima facie right.

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