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Madras Railway Company Vs. Thomas Rust - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Judge
Reported in(1891)ILR14Mad18
AppellantMadras Railway Company
RespondentThomas Rust
Excerpt:
stamp act--act i of 1879, section 3, clause 4--bond--specific relief act--act i of 1877, sections 20, 54, 57--contract act--act ix of 1872, section 39--contract for personal service--contract for more than three years--interim injunction. - .....to supply the places of the defaulters in a short time.4. it is argued that when the remedy by specific performance of a contract is expressly refused by chapter ii of the specific relief act, then by virtue of section 54, caluse 2, an injunction cannot be granted, and therefore that this contract, being one extending over more than three years and therefore not capable by section 21, clause (g) of specific performance, cannot be the subject of an injunction. it seems to me that this argument would make section 57 of the act a nullity. that section provides in the case of an affirmative agreement coupled with a negative agreement express or implied, that an injunction may be granted though specific performance could not, and it gives as illustrations some of the contracts specific.....
Judgment:

Handley, J.

1. I consider that this is a case in which an interim injunction should be granted.

2. No sufficient reason is shown in defendant's affidavit for his breach of the agreement. If any question arose between him and Mr. Phipps as to his right to conceal any trade secret he possessed, or if he had any complaint to make as to his treatment by Mr. Phipps, he should have brought the matter before the governing authority of the company and not have thrown up his employment in direct violation of his contract. It is argued that there is no mutuality in the contract because the Company has not executed the agreement, and because they can dispense with defendant's services on three months' notice. As to the first point, the Company sets up the agreement and of course is bound by it equally with the defendant. As to the second point, the Company does enter into certain covenants with the defendant, and whether on the whole the bargain is more advantageous to them or to the defendant is a question not now to be determined. The defendant made the contract, and, in the absence of fraud or duress, must be bound by it.

3. And I do not think that pecuniary damages will adequately compensate the company for the defendant's breach of contract. Unless persons who enter into contracts of this sort, on the faith of which their passage out to this country is paid, are kept to their agreement, the consequences will be very serious to employers, who will often be unable to secure the services of persons to supply the places of the defaulters in a short time.

4. It is argued that when the remedy by specific performance of a contract is expressly refused by Chapter II of the Specific Relief Act, then by virtue of Section 54, Caluse 2, an injunction cannot be granted, and therefore that this contract, being one extending over more than three years and therefore not capable by Section 21, Clause (g) of specific performance, cannot be the subject of an injunction. It seems to me that this argument would make Section 57 of the Act a nullity. That section provides in the case of an affirmative agreement coupled with a negative agreement express or implied, that an injunction may be granted though specific performance could not, and it gives as illustrations some of the contracts specific performance of which is precluded by Section 21, Clause (b). If an injunction may be granted in the case of contracts, specific performance of which is refused by Section 21, Clause (b), why not in the case of those specific performance of which is refused by Section 21, Clause (g)? It is also argued for the defendant that an injunction should not be granted because the agreement provides for a penalty for its nonperformance. But Section 20 of the Specific Belief Act provides that this should be no bar to the remedy by specific performance and the same principle applies to injunctions. I think a case has been made out for the interference of the Court by interim injunction, but it must be on terms that plaintiff company take back the defendant into their service if he is willing, and do not, pending the decision of this suit, exercise their powers under Caluse 7 of the agreement of dispensing with his services on three months' notice. Upon these terms there will be an injunction as prayed. Costs of this application to abide the result of the suit.


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