However, even in these circumstances, when a question arises before the Court, to consider granting of reliefs in the nature as prayed for by the petitioner, in my opinion, the basic consideration for the Court would be to examine as to what is the nature of the contract between the parties. Perusal of the contract and the general terms and conditions as appended thereto, more particularly, Clause (5) thereof, clearly indicate that the parties have provided that either of the parties can terminate the contract with a fifteen days notice to be served on the other party. Further such clause also provides for the validity of the contract up to 30 June 2022. It is thus clear that nature of the contract in question is determinable. If that be so, then Mr.Nankani would be correct in his contention that the provisions under sub-clause (d) of Section 14 of the Specific Relief Act which provides that a contract which is in its nature determinable,cannot be specifically enforced becomes applicable.
19. In the context of Section 14(d) of the Specific Relief Act, another
provision which would become relevant is Section 41 of the Specific
Relief Act, which provides as to when an injunction would be refused or when it cannot be granted. Section 41(e) provides that an
injunction cannot be granted by the Court to prevent the breach of a contract, the performance of which would not be specifically enforced. Thus once the nature of the contract itself is such, that it cannot be specifically enforced, Section 41 (e) of the Specific Relief Act would stare at the petitioner when the petitioner claims a relief of an injunction. Certainly the principles which are embodied in Section 14(d) read with Section 41(e) of the Specific Relief Act are applicable even when the Court considers an application under Section 9 of the Act for interim measures. It is a settled principle of law that although Section 9 is a remedy available to the parties having an arbitration agreement between them, however, when a relief for grant of an injunction is prayed for, certainly the Court would be guided by the principles as contained in the Specific Relief Act read with the provisions of Order 39 of the Code of Civil Procedure.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION (L) NO. 1366 OF 2022
Chetan Iron LLP V/s. RC Ltd.
CORAM : G.S.KULKARNI, J.
PRONOUNCED ON: 24 January, 2022
1. This is a petition filed under Section 9 of the Arbitration and
Conciliation Act, 1996 (for short “the Act”) whereby the petitioner has
prayed for interim measures pending the arbitral proceedings. The
dispute between the parties has arisen under a contract for sale of scrap
dated 21 September 2021 titled as “Scrap Sale Order” (for short ‘the
contract’), issued by the respondent in favour of the petitioner, interalia
for a sale of scrap material (Reinforcement Steel, Structural Steel, SS,
Aluminum etc.) of the following description as set out:-
1. Scrap of Plant and Machinery (Structural Steel Scrap)
2. Reiforcement Steel scrap – inclusive of all Demolition
Charges for structures and plant building upto ground level
3. SS Scrap
4. Aluminum Scrap.
2. It also appears to be not in dispute that the parties consented to
the following addition to be made to the contract on 26 October 2021.
“Note:- Items/material other than ‘plant & machinery’ related
items, Total Qty upto 200 MT.”
3. The contract provides for general terms and conditions. Clause
(3) thereof is the arbitration agreement between the parties. Clause (5)
provides for ‘Validity of the Contract’ to provide that the validity of the
contract would be upto 30 June 2022. It is provided that the petitioner
(buyer) should lift the scrap items from the identified areas on regular
basis and on accumulation of scrap materials. It further provides that
termination from either side will require 15 days notice in advance.
The other relevant clause is Clause 19 which provides that the sale shall
be on “as is where is basis” and on “ground clearance basis”, and
provides that the items shall be cleared without sorting or removal of
any part, and a pick and choose arrangement of collection would not be
permitted. It also provides that entire lots should be cleared as directed
and that lots shown should be completely removed and the site should
be cleared fully and certified by the designated officer. Clause 20
provides that at the time of removal of Scrap material, if any
usable/good material is found, the respondent would have right to
hold/retain those materials. In the course of execution of the contract,
in regard to the payments received from the petitioner, the respondent
maintained a ledger account of the petitioner, a copy of which is
annexed at ‘Exhibit F’ of the petition, which shows that the petitioner
had paid an amount of Rs.2,14,11,212/- and in addition to that it had
paid an advance amount of Rs.21,96,468/- which was the credit
balance available to the petitioner in such account.
4. The case of the petitioner is that the execution of the contract,
was smoothly taking place, until on, 24 November 2021 an unusual email
was received from the respondent to the petitioner. According to
the petitioner, addressing such mail was an attempt on the part of the
respondent to create some record, as surprisingly the petitioner was
called upon to stop further activities of lifting the material effective
from the next day to be followed by demobilization of deployed
resources. This on the ground that the petitioner should submit an
offer “as soon as possible” purportedly for complete plant and
machinery and demolition of the building. The said mail can be noted
which reads thus:-
“ Wed. Nov. 24, 2021 at 4:20 PM
Dear Paresh bhai,
Pl ref our detailed discussion over phone reg your lifting of loose
material scrap from Nylon Plant, under progress.
As briefed to you, our objective and priority is disposal of
“complete plant & machinery and demolition of Builing”.
You are requested to submit your Offer for that asap for further
discussion with and finalization by our Head – Commercial (HOA’bad).
After lifting loose material and few peripherals, whatever is now
left as on date, will be covered in the above finalization.
Hence, you are requested to stop further activities and lifting, eff
tomorrow, followed by demobilization of deployed resources.
[ Regards ]
Sandip Shah
90 999 38 999
AGM & Head – Techno Commercial
NRC, Mumbai.”
5. The petitioner responded to the above e-mail of the respondent,
informing that the petitioner was carrying out contractual work as
awarded by the respondent, pertaining to the scrap and demolition of
nylon plant as per the contract being the work order dated 21
September 2021. The petitioner stated that as it was performing the
contracted work as per the work order, hence the petitioner should not
be stopped in continuing with the contractual work, and it would be
continued to be performed as per the official documentation available
with the petitioner. It was also recorded that the commercial rates were
discussed and were closed as per the agreed negotiations. The
respondent was also informed that if the petitioner was called to stop
the work forcefully, the petitioner had no choice but to resort to legal
proceedings.
6. The petitioner thereafter addressed its advocate’s notice dated 25
November 2021 to the respondent, interalia recording about the lawful
award of the contract to the petitioner by the respondent, and that the
petitioner was carrying out the contractual work of lifting the scrap as
per the Rules and Regulations as also as per the terms and conditions of
the contract. It was recorded that suddenly on 25 November 2021, the
respondent stopped the work of the petitioner as also the petitioner
was threatened not to carry out the work. It was recorded that the
petitioner was suffering huge losses due to such conduct on the part of
the respondent. The petitioner hence called upon the respondent to
withdraw the said e-mail of the respondent calling upon the petitioner
to stop work. The respondent was also informed that the respondent
was not acting in accordance with law.
7. By a further notice dated 1 December 2021 of the petitioner’s
advocate addressed to the respondent, the petitioner again reiterated
the various happenings under the contract interalia recording that the
petitioner was suffering on day-to-day basis on account of the
respondent’s conduct. It was also recorded that in the event the
contract was to be terminated, the agreement under Clause 3 provided
for 15 days notice to be issued by either of the parties which was also
not followed by the respondent. The petitioner also invoked the
arbitration agreement and called upon the respondent to appoint an
arbitral tribunal.
8. It appears that the notices of the petitioner’s advocate were not
replied by the respondent. It is the petitioner’s case that the
respondent, however, had a different motive, as on 16 December 2021
the petitioner received a letter of the respondent which was in fact
dated 17 November 2021, which according to the petitioner, was again
intended to create a false record. By such letter, the respondent
informed the petitioner that the petitioner was warned of violating the
safety norms/requirements time and again reminders were issued by
the respondent in that regard. It was recorded that the petitioner had
no expertise in such activities, and that certain works undertaken by
the petitioner were outside the scope of the contract. On behalf of the
petitioner much emphasis is laid on such letter which according to the
petitioner was belatedly served on the petitioner on 16 December 2021
that is after one month and one day, from the actual date referred in
the said letter. The petitioner has contended that surprisingly alongwith
the said letter, the respondent annexed a note of one Shri.Vilas S.
Supnekar, Consultant (Safety), dated 14 November 2021, purportedly
recording violation of safety norms by the petitioner. It is contended by
the learned Counsel for the petitioner that the contents of the said note
are also dubious as they are in the absence of any prior existing
material exchanged between the parties like notices, joint inspection
etc. Learned Counsel for the petitioner has also submitted that to such
report which was dated 14 November 2021, surprisingly the
photographs dated 22 November 2021 were annexed, which clearly
showed a malafide intention on the part of the respondent against the
petitioner.
9. The petitioner has contended that it is on the above backdrop
surprisingly a notice for Online Auction was issued by the respondent
for sale of nylon plant and building structure on “as is where is basis”.
The date for online auction was notified to be on January 11, 2022
between 3 p.m. to 4 p.m. The petitioner, in these circumstances,
addressed a notice of its Advocate dated 4 January 2022 calling upon
the respondent not to create third party interest in respect of the work
which was awarded to the petitioner, under the contract in question,
under the online auction as proposed by the respondent on 11 January
2022. It appears that the online auction was thereafter postponed to
18 January 2022 to be held between 12 noon to 1 p.m.
10. It is on the above circumstances, the petitioner has approached
this Court praying for interim measures under Section 9 of the Act.
The petitioner has prayed for the following reliefs:-
“a. That pending the hearing and final disposal of the arbitration
this Hon’ble Court be pleased to order and direct the Respondent to
comply with Sale-Order for Scrap material dated 21st September 2021
(as amended on 25th October 2021);
b. That pending the hearing and final disposal of the arbitration,
the Respondent be restrained by an order and injunction of this
Hon’ble Court from in any manner creating any third party rights in
respect of the scrap of Plant and Machinery of the Respondent at NRC
Site and from intermeddling or interfering with or exercising in any
manner control or dominion over, or dealing with or disposing of any
part thereof;
c. That pending the hearing and final disposal of the arbitration,
this Hon’ble Court be pleased to stay the effect and implementation of
the e-auction / tender and restrain the Respondent from issuing any
auction / sale in respect of the scrap of Plant and Machinery at NRC
Site;
d. That pending the hearing and final disposal of the arbitration,
the Respondent, by themselves, their servants and agents, be
restrained by an order and injunction of this Hon’ble Court from in
any manner preventing or obstructing the Petitioner from entering
into or remaining upon the NRC site and carrying-out the work as
required under Sale-Order datd 21st September 2021 (as amended on
26th October 2021);
e. For interim and ad-interim reliefs in terms of prayer clauses
(a) to (d) above;
f. For costs.
g. For such further and other reliefs as the nature and
circumstances of the case may require.”
11. The Court heard the parties on the present petition on 18
January 2022, when an order came to be passed recording that the
auction had already taken place on the very day, however, the work
order was not issued by the respondent to the successful bidder. The
Court, in these circumstances, observed that till the parties are heard
on the adjourned date, work order be not issued. The said order reads
thus :
1. Stand over to 20 January, 2022 to enable the
respondent to place on record reply affidavit setting out
their opposition to the petition.
2. It appears that the auction was to be held today and
as informed by Mr. Surve, learned counsel for the
petitioner, it was to be held between 2.30 p.m. to 5.30
p.m. However, Mr. Nankani, learned senior counsel for
the respondent informs that the auction has already
taken place at the time the Court is passing this order,
which is at 1.42 p.m. Mr. Nankani, on instructions, has
stated that Work Order is yet to be issued and only email
communication to the successful bidder has been made
by the respondent.
3. Be that be the case, let the Work Order be not issued
till the adjourned date of hearing. Ordered accordingly
4. On the adjourned date of hearing, the parties would
be heard on their rival contentions and an endeavour
would be made to pass appropriate orders.
5. Let the reply affidavit be served by tomorrow evening
on the petitioners.
12. On behalf of the respondent, a reply affidavit has been filed
opposing the petition. In such affidavit although objections are raised
in regard to the seat of the arbitration being outside the jurisdiction of
this Court, Mr.Nankani learned Senior Counsel for the respondent has
not pressed such objection and rightly so. The reply affidavit points out
the steps taken to undertake the e-auction with effect from 11 January
2022. It is stated that on 18 January 2022 the e-auction was
undertaken and completed and on its completion an e-mail was
addressed to the successful participant. The affidavit states that in the
said e-auction an offer has been received by the respondent in the sum
of Rs.40 crores. The affidavit also raises an objection that this is not a
case where the petitioner can seek specific performance of the contract
as the contract, in its nature itself is determinable. The affidavit on the
basis of the correspondence which is noted above, states that the
petitioner was not in a position to perform the contractual work as
awarded to the petitioner and/or that the petitioner was not interested
to perform the work. It is stated that the petitioner was also resorting
to malpractices with a view to obfuscate the completion of the eauction.
The affidavit accordingly prays that the petitioner is not
entitled to any interim relief.
13. Mr.Surve, learned Counsel for the petitioner, drawing the Court’s
attention to the documents as placed on record, would submit that a
concluded contract under sale-order in question subsists between the
parties and which was being appropriately executed by the petitioner.
He submits that without the petitioner being informed of any
substantive grievance, the respondent in an illegal manner has
prevented the petitioner from performing the work in question of
removing the scrap, for which at all material times advance payment
was made by the petitioner to the respondent. He submits that what is
most material is that although clause (5) of the general terms and
conditions specifically provide for a 15 days notice to be issued by
either parties to terminate the contract, the respondent has not
terminated the contract and without terminating the contract, has
sought to issue online auction notice to auction the very sale which was
awarded to the petitioner under the contract in question. It is
submitted that all the letters issued by the respondent with effect from
24 November 2021 and thereafter, clearly showed the motives on the
part of the respondent to prevent the petitioner from performing the
contract so as to award the contract to a third party. Mr.Surve has
submitted that the apprehensions of the petitioner have come true
when the very same contract as awarded by the respondent to the
petitioner is now being awarded to a third party, as being done by
issuance of the Online Tender in question. Mr.Surve would hence
submit that this is a clear case where the respondent despite
subsistence of its contract with the petitioner, has taken a position that
the respondent would nonetheless award the said contracted work to a
third party and which was certainly not permissible for the respondent
to do so, during the subsistence of the petitioner’s contract. It is
therefore, submitted that the petitioner is entitled for the reliefs as
prayed for.
14. Mr.Nankani, learned Senior Counsel for the respondent would
submit that none of the contentions as urged on behalf of the petitioner
ought to be accepted by the Court. It is his submission that it is a large
plant of the respondent which is now sought to dismantled and for
such work an online auction was proposed by the respondent.
Referring to the document of “E-auction”, he submits that such
document itself indicates the nature of the work in “Annexure I”, which
according to him, may include the work which was awarded to the
petitioner. It is submitted that the petitioner notwithstanding the
contract in question cannot claim any right in the respondent issuing an
e-auction.
15. Mr.Nankani would next submit that in any event the petitioner is
not entitled to the reliefs as prayed for in view of the provisions of
Section 14(d) of the Specific Relief Act,1963, as the nature of the
contract as awarded to the petitioner itself is determinable which is
clear from the termination clause which requires a 15 days notice to be
issued by either party who is intending to terminate the contract.
Mr.Nankani would submit that the only remedy for the petitioner if it
feels aggrieved by any action of the respondent, is to seek damages and
which can only be in an adjudication in the arbitral proceedings. Mr.
Nankani, on instructions, has also submitted that his client has no
objection to refund the petitioner the advance of Rs.21,96,468/-
accepted by the respondent.
16. In regard to the e-auction, Mr. Nankani has submitted that the eauction
as undertaken by the respondent being for the entire plant and
machinery, hence, the contract awarded to the petitioner ought not to
come in the way of the respondent awarding the work as comprised
under the online auction. It is his submission that the petitioner has
raised disputed issues which can be gone into only in the arbitral
proceedings. He accordingly submits that the petition ought not to be
entertained and be dismissed.
17. Mr.Surve, in rejoinder would submit that the provisions of
Section 14(d) of the Specific Relief Act are not applicable inasmuch as
there is no termination of the contract in question as awarded by the
respondent to the petitioner. He submits that the nature of the contract
as awarded to the petitioner is absolutely clear and that there was no
ambiguity whatsoever as the contract was also partly performed, which
also pertained to the nylon plant as clear from the petitioner’s
quotation dated 20 September 2021 and acceptance of the same in the
contract.
18. Having heard learned Counsel for the parties and having perused
the record, it is quite clear that the contract as awarded by the
respondent to the petitioner has not been terminated and/or that the
contract is partly performed by the petitioner by lifting some material
on payment of the price to the respondent. However, even in these
circumstances, when a question arises before the Court, to consider
granting of reliefs in the nature as prayed for by the petitioner, in my
opinion, the basic consideration for the Court would be to examine as
to what is the nature of the contract between the parties. Perusal of the
contract and the general terms and conditions as appended thereto,
more particularly, Clause (5) thereof, clearly indicate that the parties
have provided that either of the parties can terminate the contract with
a fifteen days notice to be served on the other party. Further such
clause also provides for the validity of the contract up to 30 June 2022.
It is thus clear that nature of the contract in question is determinable. If
that be so, then Mr.Nankani would be correct in his contention that the
provisions under sub-clause (d) of Section 14 of the Specific Relief Act
which provides that a contract which is in its nature determinable,
cannot be specifically enforced becomes applicable.
19. In the context of Section 14(d) of the Specific Relief Act, another
provision which would become relevant is Section 41 of the Specific
Relief Act, which provides as to when an injunction would be refused
or when it cannot be granted. Section 41(e) provides that an
injunction cannot be granted by the Court to prevent the breach of a
contract, the performance of which would not be specifically enforced.
Thus once the nature of the contract itself is such, that it cannot be
specifically enforced, Section 41 (e) of the Specific Relief Act would
stare at the petitioner when the petitioner claims a relief of an
injunction. Certainly the principles which are embodied in Section
14(d) read with Section 41(e) of the Specific Relief Act are applicable
even when the Court considers an application under Section 9 of the
Act for interim measures. It is a settled principle of law that although
Section 9 is a remedy available to the parties having an arbitration
agreement between them, however, when a relief for grant of an
injunction is prayed for, certainly the Court would be guided by the
principles as contained in the Specific Relief Act read with the
provisions of Order 39 of the Code of Civil Procedure.
20. In the above context, it would be apposite to consider the
position in law. In the celebrated commentary of Pollock and Mulla
on “The Indian Contract Act and the Specific Relief Act”, (14th
Edn, Volume II, page 1939), the views of the learned authors on
‘determinable contracts’ being not enforceable as per the
provisions of Section 14(1)(c) (pre 2018 amendment) of the
Specific Relief Act need to be noted, which read thus:
“Clause (c): Determinable Contracts
… ….. ….
A contract, which is in its nature revocable, or determinable as
described in Specific Relief Act, is not enforceable by specific
performance. Specific performance is not decreed if the
defendant would be entitled to revoke or dissolve a contract
when executed, as in the case of a contract containing an
express power of revocation, since it would be idle to do that
which might instantly be undone by one of the parties.
(emphasis added)
21. The following decisions would throw light on the principles of
law the Courts have consistently followed in refusing injunctory reliefs
and specific performance of the contract, when the nature of the
contract is determinable.
In Indian Oil Corporation Ltd v Amritsar Gas Service and Ors,1
the Supreme Court was considering a dispute between the parties as
arising under a distributorship agreement which permitted either party
to terminate the agreement by 30 days’ notice to the other party
without assigning any reason for the termination. A dispute had arisen
between the parties on wrongful termination of the agreement. The
dispute was referred to arbitration. The arbitral tribunal in its award
granted restoration of the distributorship as one of the reliefs to the
claimant. This relief granted by the arbitral Tribunal was challenged by
the appellant under Section 34 asserting the applicability of Section
14(1)(c) of the Specific Relief Act contending that when the arbitral
tribunal having noted that the contract was determinable, it could not
have proceeded to grant a relief of specific performance of the contract.
In such context, the Supreme Court held that the contract in question
by its nature was determinable, hence granting the relief of restoration
of the distributorship was contrary to the mandate of Section 14(1)(c)
of the Specific Relief Act. In paragraph 12 it was observed thus :-
1 (1991)1 SCC 533
“12.… … … The finding in the award being that the
Distributorship Agreement was revokable and the same being
admittedly for rendering personal service, the relevant
provisions of the Specific Relief Act were automatically
attracted. Sub-section (1) of Section 14 of the Specific Relief Act
specifies the contracts which cannot be specifically enforced, one
of which is ‘a contract which is in its nature determinable’. In the
present case, it is not necessary to refer to the other clauses of
sub section (1) of Section 14, which also may be attracted in the
present case since clause (c) clearly applies on the finding read
with reasons given in the award itself that the contract by its
nature is determinable. This being so granting the relief of
restoration of the distributorship even on the finding that the
breach was committed by the appellant-Corporation is contrary
to the mandate in Section 14(1) of the Specific Relief Act and
there is an error of law apparent on the face of the award which
is stated to be made according to ‘the law governing such cases.’
The grant of this relief in the award cannot, therefore, be
sustained.
(emphasis added)”
22. In Spice Digital Ltd. vs. Vistaas Digital Media Pvt. Ltd., 2012 SCC
Online Bom 1536, learned Single Judge of this Court was considering
an appeal filed under section 37 of the Act against an order of the
arbitral tribunal passed under Section 17 of the Act, refusing a relief of
interim injunction to the applicant on the ground that the contract
between the parties was determinable. It was held that the tribunal
was right in refusing to grant injunction under section 17 of the Act, as
the same would have amounted to granting a relief against the
provisions of the Specific Relief Act. The Court, accordingly, rejected
the appeal. Mr.Justice R.D.Dhanuka speaking for the bench observed
thus:
“20. In my view, the arbitral tribunal was right in its prima facie
view that clause 6.2 read with clause 12.1 shows that the
contract is determinable during the lock in period. Section 14(1)
(c) provides that the contract which in its nature is
determinable, cannot be specifically enforced. The Judgments of
the Supreme Court in the case of Indian Oil Limited (supra),
Delhi High Court and also the judgment of the Supreme Court in
the case of Cox and Kings are clearly applicable to the facts of
this case. In my view, the arbitral tribunal has interpreted the
terms of the contract and has recorded prima facie finding that
the contract is determinable and thus no specific performance of
such contract can be enforced in view of section 14(1)(c). This
interpretation of the arbitral tribunal is a possible interpretation
and thus no interference is warranted at this stage.
21. In my view, the injunction sought by the Appellant under
section 17 of the Arbitration Act, 1996 for the contract which is
determinable or is terminated even according to the appellant,
such injunction is statutorily prohibited. In my view, at the
interim stage, the arbitral tribunal while deciding application
under section 17 and the court deciding application under
section 9 of the Arbitration Act, 1996 cannot continue operation
of such determinable contract or the same having been
terminated otherwise it would amount to re-writing the
contract. In my view the arbitral tribunal was thus right in
refusing to grant injunction under section 17 of the Arbitration
Act, 1996. Even otherwise, the arbitral tribunal has given a
finding of fact after considering the facts, provisions of the
agreement and the provisions of Specific Relief Act and thus no
interference is warranted by this court with such finding of fact
recorded by the arbitral tribunal at this stage.”
23. In “Mittal Services Vs. Escotel Mobile Communication Ltd.”2
learned Single Judge of Delhi High Court in the context of a franchisee
agreement, observed that the prayer of the plaintiff therein, that the
defendant be restrained by an injunction from appointing another
franchisee in the concerned territory, could not have been granted, as
the contract in the said case contained a clause which provided for
2 AIR 2003 Delhi 410
termination of the agreement with a ninety days advance notice in
writing. It was also observed that the agreement was for a specific
period of five years and that too determinable by any party, by serving
a 90 days advance notice. In these facts, the Court observed that
Section 41(e) of the Specific Relief Act would get attracted which
provided that no injunction can be granted to prevent breach of the
contract, the performance of which is not specifically enforceable. It
was observed that as the agreement in its nature was determinable by
giving a 90 days advance notice in writing, the agreement obviously
was one which could not have been specifically enforceable. The Court
also referring to the decision of the Division Bench of the Delhi High
Court in “Rajasthan Breweries Ltd. Vs. Stroh Brewery Company”3
wherein the Division Bench had upheld the findings of the learned
Single Judge which were to the effect that when an injunction prayed
for was statutorily prohibited on a conjoint reading of Section 41 and
14(1)(c)4 of the Specific Relief Act, as the contracts in question were
determinable in nature, no injunction could be granted, and this would
be the mandate of law. I am in complete agreement with a view taken
by the learned Single Judge of this Court in Spice Digital Ltd. (supra)
as also the decision of the learned Single Judge of the Delhi High Court
3 AIR 2000 Delhi 450
4 As it then stood prior to 2018 Amendment.
in Mittal Services (supra).
24. The position in law as laid down in the above decisions is fully
applicable to the facts of the present case which in my clear opinion,
dis-entitles the petitioner for any reliefs as prayed for. It needs to be
observed that an exception to Section 41(e) of the Specific Relief Act as
carved out in Section 42 of the Specific Relief Act is also not applicable
in the facts of the present case. In any event the petitioner cannot be
granted any relief applying the well settled principle that an interim
relief can be granted only in aid of and ancillary to the main relief. It is
prima facie seen that a relief of specific performance or an injunction
cannot be granted to the petitioner, hence, a relief of a temporary
injunction as an interim measure cannot be granted to the petitioner,
pending the arbitral proceedings.
25. Now to discuss the reliefs as prayed for by the petitioner, it is
seen that the reliefs as prayed for, in terms of the prayer clause (a) and
(d) are in the nature of a final relief, that is, they are as good as in the
nature of granting a specific performance of the contract, which for the
aforesaid reasons, certainly cannot be granted. Insofar as prayer clause
(b) and (c) are concerned, they are in the nature of an injunction
which cannot be granted to the petitioner in the context of the contract
in question, which cannot be ordered to be specifically performed.
26. In the aforesaid circumstances, the petition needs to fail. It is
accordingly dismissed. No costs.
27. Needless to observe that the observations as made above are
prima facie and are only in the context of the present proceedings. The
rights and contentions of the parties in the event the disputes are
referred to arbitration, are expressly kept open.
28. At this stage Mr.Surve, learned Counsel for the petitioner seeks
continuation of the ad-interim order passed by this Court. In the facts
of the present case, such protection cannot be granted. It is accordingly
rejected.
29. At this stage Mr.Surve, learned Counsel for the petitioner has
made a request that the disputes as arisen between the parties be
referred to arbitration by appointing a sole arbitrator. Mr.Nankani,
learned Senior Counsel for the respondent, on instructions, would not
be averse to such course of action as suggested by Mr.Surve. There is
consensus between the parties that the disputes be referred to
arbitration, and this Court appoints an arbitrator. In the circumstances,
the suggestion needs to be accepted. Accordingly Mr.Vikramaditya
Deshmukh, Advocate of this Court is appointed as a sole arbitrator to
adjudicate the disputes and differences between the parties as arisen
under the Scrap Sale Order (“the said contract”) dated 21 September
2021. The learned Sole Arbitrator before entering the reference shall
make a declaration as per the provisions of Section 11(8) read with
Section 12(1) of the Act and furnish copies of the same to the parties as
also forward the same to the Prothonotary and Senior Master of this
Court to be placed on record. The parties are at liberty to approach the
learned Sole Arbitrator within a period of 10 days from today on a
mutual convenient date as may be fixed by the learned Arbitrator. The
fees of the arbitral proceedings shall be shared by the parties in equal
proportion and the same shall be governed as per the Fourth Schedule
to the Act. All contentions of the parties on merits are expressly kept
open.
30. Mr.Nankani, at this stage, fairly states that an advance amount of
Rs.21,96,468/- accepted by the respondent from the petitioner, shall be
refunded to the petitioner within two weeks from today, which shall be without rights and contentions of the respondent in the arbitral
proceedings.
31. Needless to observe that the above arrangement is subject to the
rights of the petitioner to assail the rejection of its Section 9 petition by
the aforesaid order. All contentions in that regard are expressly kept
open.
32. Disposed of in the above terms. No costs.
33. Office to forward a copy of this order to the learned Arbitrator on
the following address:-
1W Dilwara West, 1st Floor,
Next to Cooperage Tel.Exchange,
Maharshi Karve Road,
Mumbai-400021
Mob.No.9820675957
Email:vikram.deshmukh@gmail.com
(G.S.KULKARNI, J.)
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