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High Court Of Calcutta
U. C. BANERJEE, SIDHESWAR NARAYAN
BIKASH CHANDRA DEB - Appellant
Versus
VIJAYA MINERALS PVT LTD - Respondent
Suit 392 Of 1994
Decided On : 07/10/1995
SPECIFIC PERFORMANCE - AGREEMENT FOR SALE OF MINERALS - INTERIM INJUNCTION - VALIDITY OF AGREEMENT - BALANCE OF CONVENIENCE - FORUM CONVENIENCE CLAUSE.
Fact of the Case:
The appellant challenged an interim injunction granted by the trial court restraining him from selling or disposing of manganese and iron ore from his mine to anyone other than the respondent, who was the sole and only buyer under an agreement between the parties. The appellant argued that the agreement was onerous, unconscionable, and unenforceable, and that the interim injunction amounted to specific performance of the agreement without a decree.
Finding of the Court:
The court held that the appellant had not made out a prima facie case for intervention at the interlocutory stage. It found that there was a written agreement between the parties, that a sum of Rs. 15 lacs had been paid as consideration money, and that the agreement did not confer an unfair advantage on the respondent. The court also held that the balance of convenience did not favor the appellant, and that the forum convenience clause in the agreement was valid.
Issues: 1. Whether the agreement between the parties was valid and enforceable. 2. Whether the interim injunction granted by the trial court was justified. 3. Whether the balance of convenience favored the appellant.
Ratio Decidendi: 1. The court held that the agreement between the parties was valid and enforceable. It noted that there was a written agreement, that a sum of Rs. 15 lacs had been paid as consideration money, and that the agreement did not confer an unfair advantage on the respondent. 2. The court held that the interim injunction granted by the trial court was justified. It found that the appellant had not made out a prima facie case for intervention at the interlocutory stage, and that the balance of convenience did not favor the appellant. 3. The court held that the balance of convenience did not favor the appellant. It noted that the appellant had not suffered any irreparable injury, and that the respondent would suffer significant harm if the injunction were lifted.
Final Decision: The court dismissed the appellant's stay application and directed the parties to take expeditious steps for the disposal of the suit.
( 1 ) THIS stay petition is directed against an order of the learned Single Judge, confirming the earlier interim order passed in the matter.
( 2 ) ONE redeeming feature, however, ought to be noted at this juncture that against the grant of interim order in terms of prayers (c) and (d) of the petition, the appellant herein moved this Court on an earlier occasion, but this Court did not consider it fit to pass any order and disposed of the matter with an observation that the main interlocutory application ought to be disposed of with utmost expedition.
( 3 ) THE records depict that the matter has since been finally disposed of by the learned Trial Judge, wherein the interim order passed earlier stands confirmed and it is against the final order in the interlocutory application that mr. Anindya Mitter has moved this application for stay.
( 4 ) MR. Mitter appearing in support of the stay application submitted in no uncertain terms that even though there exists an agreement between the parties but the same relates to specific performance of movables being ordinary articles of commerce and the terms depict that the same is for an indefinite period and does not provide for revision of price. The agreement Mr. Mitter contended has never been acted upon nor was given any effect and the Court ought not to lend its assistance and grant specific performance of the said agreement, as otherwise it could be giving effect to an onerous contract between the parties.
( 5 ) ADMITTEDLY there exists an agreement between the parties and the appellate Court cannot possibly intervene or interfere at this stage of the proceedings, more so, when the suit is still pending disposal before this Court. As noted above, there exists a written agreement between the parties dated 1st october, 1994 and on the basis thereof the appellant has agreed and declared that he shall not sell or otherwise part with or dispose of any Manganese and iron Ore from the mine and the buyer being the respondent herein and the plaintiff in the suit, shall be the sole and the only buyer of all the manganese and iron ore from the mine during the continuance of the agreement.
( 6 ) MR. Mitter, however, drew our attention to the factum of the rates, as has been mentioned in the agreement and submitted that the rate is so inexplicably low that the same cannot but be termed to be an unconscionable bargain which the Law Court ought not to enforce and the parties cannot possibly be ad idem on that score and the agreement cannot thus be declared to be valid.
( 7 ) THE agreement, however, records as a matter of fact transfer of a sum of rs. 15 lacs to the appellant, though Mr. Mitter in no uncertain terms upon instructions submitted that the receipt of the sum of Rs. 15 lacs has been disputed by his client and as a matter of fact Mr. Mitter contended that no such payment as has been recorded in the agreement, has been made.
( 8 ) MR. Mitter's further submission is that there appears to be existing a negative covenant which in any event is unenforceable and question of directing specific performance of the contract does not and cannot arise. Mr. Mitter contended that the grant of the interim order of injunction in terms of prayers (c) and (d) of the petition would unmistakably lead to the conclusion that the agreement has bene given effect to without the suit being decreed.
( 9 ) FOR convenience's sake, prayers (c) and (d) of the petition are set out hereinbelow, as has been passed by the learned Trial Judge :" (C) Injunction restraining the defendant, its servants, agents and/or assigns from transferring and/or selling and/or delivering any extracted manganese and iron ore lying at and/or to be extracted at the Inganijharan Mines located at Village Inganijharan, Dist. Keonjhar, Orissa covering 284 acres of land and more fully described in Annexure-A hereto to any third party save and except the petitioner herein ; (d) Injunction restraining the defendan
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