Court dismisses plaintiff's injunction bid due to lack of contracts. Covenant unenforceable. Injunction vacated for non-compliance. Defendant awarded costs.

The court dismissed the plaintiff's application for an interim injunction as there were no existing contracts with Sidel, Husky, or the defendant. The restrictive covenant in the July 28, 1995 agreement was unenforceable. The plaintiff's failure to comply with the mandatory provisions of Order 39 Rule 3 led to the vacation of the interim injunction granted on August 16, 1996. The defendant's application was allowed, with costs of Rs. 5,000 to be paid by the plaintiff.

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Issues Involved:
1. Validity of the interim injunction granted on August 16, 1996.
2. Validity and enforceability of the agency agreements between the plaintiff and Sidel and Husky.
3. Validity and enforceability of the agreement between the plaintiff and the defendant dated July 28, 1995.
4. Compliance with Order 39 Rule 3 of the Civil Procedure Code.

Issue-wise Detailed Analysis:

1. Validity of the interim injunction granted on August 16, 1996:
The plaintiff filed I.A. No.7411/96 for interim injunction under Order 39 Rules 1 & 2 read with section 151 Civil Procedure Code, while the defendant filed I.A. No.8466/96 under Order 39 Rule 4 read with Section 151 Civil Procedure Code to vacate the ex-parte ad interim injunction granted on August 16, 1996. The interim order restrained the defendant from acting on behalf of or dealing with Sidel & Husky directly.

2. Validity and enforceability of the agency agreements between the plaintiff and Sidel and Husky:
The plaintiff had agency agreements with Sidel and Husky, both effective from mid-1994 and valid for two years with automatic renewal unless terminated by a six-month prior notice. The plaintiff claimed that Sidel's notice of cancellation dated December 18, 1995, was invalid as it was not given six months prior to the expiry of the contract period. The court noted that the validity of the termination notice is a matter between the plaintiff and Sidel, to be decided in a competent forum. The court observed that the agency agreements with Sidel and Husky had been terminated, and there were no subsisting contracts between the plaintiff and these companies.

3. Validity and enforceability of the agreement between the plaintiff and the defendant dated July 28, 1995:
The plaintiff and defendant had an agreement dated July 30, 1994, which was modified on July 14, 1995, and was valid until March 31, 1996. The plaintiff claimed a fresh agreement was made on July 28, 1995, which included a clause preventing the defendant from working directly with the plaintiff's clients for three years after leaving Petequip. The court found that the terms in the letter dated July 28, 1995, were not implemented and did not form a concluded contract. Therefore, the restrictive covenant in clause 8 was unenforceable under Section 27 of the Contract Act as it was in restraint of trade. The court concluded there was no subsisting contract between the plaintiff and the defendant after March 31, 1996.

4. Compliance with Order 39 Rule 3 of the Civil Procedure Code:
The defendant argued that the plaintiff did not comply with the mandatory provisions of Order 39 Rule 3 Civil Procedure Code, which requires delivering or sending a copy of the application for injunction and relevant documents to the opposite party immediately after the order granting ex-parte injunction. The plaintiff filed the affidavit of compliance late, after arguments had commenced. The court emphasized that compliance with this provision is mandatory, and non-compliance necessitates vacating the ex-parte order of injunction.

Conclusion:
The court found that the plaintiff was not entitled to interim injunction as there was no subsisting contract between the plaintiff and Sidel, Husky, or the defendant. The restrictive covenant in the agreement dated July 28, 1995, was unenforceable under Section 27 of the Contract Act. Additionally, the plaintiff failed to comply with the mandatory provisions of Order 39 Rule 3 Civil Procedure Code. Consequently, I.A. No.7411/96 filed by the plaintiff was dismissed, and I.A. No.8466/96 filed by the defendant was allowed, vacating the interim injunction granted on August 16, 1996, with costs assessed at Rs. 5,000 to be paid by the plaintiff.

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