A, film actress, agreed to render exclusive services to B and not render services to others. She breaches and contracts with another company. What remedy for B?

The Starting Point: Why Specific Performance Is Unavailable

The first thing B must understand is that he cannot run to court and ask for a decree compelling A to perform — to actually act, sing, or render the services she had promised. Section 14(1)(b) of the Act places contracts involving the performance of continuous duties that the court cannot supervise beyond the reach of specific performance. More directly, section 14(1)(c) makes it clear that a contract which is, in its very nature, dependent on the personal qualifications or the volition of the parties — and what can be more personal than the art of an actress — cannot be specifically enforced. The court cannot stand over A and compel her creative output; to do so would be to treat her as an instrument rather than a person. This position has been settled in Indian law for well over a century.

From this flows the further complication created by section 41(e): an injunction cannot ordinarily be granted to prevent the breach of a contract the performance of which would not be specifically enforced. On a plain reading, this would seem to leave B without any remedy whatsoever. However, the law here does not end — it pivots.

The Pivot: Section 42 and the Doctrine of Lumley v. Wagner

Section 42 of the Specific Relief Act is the critical provision. It stands as an express exception to section 41(e) and enacts the celebrated principle first worked out in the English case of Lumley v. Wagner (1852 1 De GM&G 604).

The facts of Lumley were remarkably close to our problem. Johanna Wagner, an opera singer, had contracted with Mr. Lumley to sing exclusively at his theatre, and not to sing at any other place of public entertainment without his written permission. She broke her word and contracted to sing elsewhere. The court could not compel her to sing for Lumley — that was not disputed. But Lord St. Leonards LC held that the court could restrain her from singing anywhere else. The reasoning was elegant: where the parties have, for valuable consideration, with their eyes open, contracted that a certain thing shall not be done, all that a court of equity has to do is to say — by way of injunction — that which the parties have already said by way of covenant. The injunction does nothing more than give the sanction of the court's process to what is already the contract between the parties. It is the specific performance, by the court, of the negative bargain which the parties made.

Section 42 incorporates and enacts this principle in the following terms: notwithstanding section 41(e), where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement — provided that the plaintiff has not failed to perform the contract so far as it is binding on him.

Applying this to A and B: A's agreement contains an affirmative covenant — to render exclusive services to B — and a negative covenant — not to render those services to any other person. The court cannot compel A to act for B. But under section 42, B is entitled to an injunction restraining A from rendering services for the rival company, i.e., from committing a breach of her negative agreement. This is precisely the principle applied in Warner Brothers Pictures Inc. v. Nelson (1937 1 KB 209), where a film actress undertook to act exclusively for the plaintiffs and not for any other person without their written consent. The court issued an injunction restraining her from acting for third parties, though it was careful to frame the injunction so as not to leave her without any means of earning a livelihood — she could work in some capacity other than as an actress.

The Supreme Court of India affirmed and applied these principles with great clarity in Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. Ltd. (AIR 1967 SC 1098), holding that a negative covenant operating during the subsistence of a contract of employment, binding the employee to serve his employer exclusively, is generally not regarded as a restraint of trade under section 27 of the Indian Contract Act, 1872, and can be enforced by an injunction under section 42 of the Specific Relief Act.

The Conditions That Must Be Met

The availability of this remedy to B is not unconditional. Several requirements must be satisfied before the court will act:

First, there must be a distinct negative stipulation — either express or implied — in the contract. In A and B's case, there is an express covenant that A will not render services to others, so this condition is clearly satisfied. Where there is no such express covenant, a negative covenant may sometimes be implied from the very nature of a contract of exclusive personal service, as the Calcutta High Court held in Burn Co. v. McDonald (1908 ILR 36 Cal 354), where an employee who agreed to devote himself entirely to his employer's work for five years was held to have impliedly agreed not to give his services to any other person during that period.

Second, the negative covenant must be capable of being separated from the affirmative agreement. If the two are so intertwined that enforcing the negative effectively compels performance of the positive, the court will not grant the injunction. The test was crystallised in Gujarat Bottling Co. Ltd. v. Coca-Cola Co. (1995 5 SCC 545): an injunction to enforce a negative covenant will be refused if it would indirectly compel the defendant either to perform the positive obligation or to remain wholly idle. B cannot seek an injunction that leaves A with no choice but to act for him or to starve. The injunction should be confined to restraining her from working for the rival company, not from working in any capacity whatsoever.

Third, the proviso to section 42 is of critical importance: B must not himself have failed to perform the contract so far as it is binding upon him. This rests on the ancient maxim of equity — he who seeks equity must do equity. If B is in breach of his own obligations under the contract, the court will shut its doors to him.

Fourth, the negative covenant must not be in violation of section 27 of the Indian Contract Act, 1872. A negative covenant operating during the period of the contract is generally valid, since the employee is being paid to serve exclusively. But a covenant seeking to extend beyond the contractual period — restraining A from working anywhere in the country after the contract ends — would be void as a restraint of trade. In Percept D'Mark India Pvt. Ltd. v. Zaheer Khan (2006 4 SCC 227), the Supreme Court categorically held that a post-contractual negative covenant restraining a party from carrying on any profession in the field is void under section 27 of the Contract Act and no injunction will be granted to enforce it.

Fifth, this being a discretionary remedy, the court will refuse it if monetary damages would adequately compensate B. In the case of an actress of special skill and reputation, it is ordinarily recognised that the injury to B is not easily reducible to a money sum — the goodwill of having that actress's name attached to B's production, the unique drawing power she brings, and the consequent loss of reputation and audience are all factors that no sum of money can restore. This is the reason why the remedy has historically been applied with particular force in the case of performers of exceptional skill and reputation.

The Form and Scope of the Remedy

The injunction B obtains under section 42 is a negative injunction — it does not direct A to act for B, but restrains her from acting for the rival company during the subsistence of the contract. Whether this is sought as an interlocutory injunction pending the disposal of the suit, or as a perpetual injunction in the final decree, the same principle operates. There is a divergence of views on whether section 42 covers only the final hearing or extends to interlocutory orders as well, but the better view — supported by the principle enunciated in Cotton Corporation of India Ltd. v. United Industrial Bank Ltd. (AIR 1983 SC 1272) — is that if the final relief can be granted at the conclusion of the suit under section 42, the interlocutory relief in identical terms can also be granted during its pendency.

In summary, B's remedy is an injunction under section 42 of the Specific Relief Act, 1963, restraining A from rendering her services to the other company — provided B has performed his own obligations, the negative covenant is distinct and not a disguised form of specific performance, and the injunction would not leave A wholly without the ability to earn a livelihood. B cannot compel A to act; but he can prevent her from acting for a rival. And in the theatre of equity, that is often remedy enough.