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2016 Supreme(Del) 1331
IN THE HIGH COURT OF DELHI AT NEW DELHI
VIPIN SANGHI, J.
Ushakant Buildwell (P) Limited - Plaintiff
Versus
Chinar Shipping & Infrastructure (India) P. Ltd. & Anr. - Defendants
I.A. Nos. 12223/2015 & 16304/2015 in CS(OS) 1745/2015
Decided On : 15-03-2016
Joy Basu, Sr. Adv with Ekta Sikri, Amit Kumar and Abhinav, Advocates
Ravi Gupta, Sr. Adv. with Dhiraj Jain, Sachin Jain and Bhoomija Verma, Advocates, Raushan Kumari and Mohit Kumar for DJB
The court emphasized the determinable nature of the contract and the importance of prompt action in seeking legal remedies.
Headnote:
Specific Performance - Sale of Dredged Sand - Order 39 Rule 1&2 CPC - Agreement dated 14.11.2013 - Supplementary agreement dated 06.02.2014 - Delhi Jal Board (DJB) - National Green Tribunal (NGT) - Injunction - Termination of Contract - Specific Performance - Liquidated Damages - Determinable Contract - Delay and Laches
Fact of the Case:
The plaintiff filed for specific performance of an agreement for the sale of dredged sand. The defendants terminated the contract, leading to a dispute over the enforceability of the contract and the grant of interim relief.
Finding of the Court:
The court found that the plaintiff failed to establish a prima facie case for the grant of any injunction due to the determinable nature of the contract and the plaintiff's delay in taking action after the contract termination.
Issues: Enforceability of the contract, grant of interim relief, determinable nature of the contract, delay and laches.
Ratio Decidendi: The contract was found to be determinable, and the plaintiff's delay in taking action after the contract termination was considered as a factor in denying the grant of interim relief.
Final Decision: The plaintiff's application for interim relief was dismissed, and the defendant's application to seek vacation of the interim order was granted.
Vipin Sanghi, J.
1. The first application has been filed by the plaintiff under Order 39 Rule 1&2 CPC to seek interim relief and the second application has been filed by the defendant under Order XXXIX Rule 4 CPC to seek vacation of the interim order passed by this court. The suit has been filed by the plaintiff to seek specific performance of the agreement dated 14.11.2013 as well as the supplementary agreement dated 06.02.2014 entered into between the plaintiff on the one hand, and the defendant nos.1 and 2 on the other hand.
2. The defendants, acting as a consortium – whereunder defendant no.1 was the lead partner, entered into an agreement with the Delhi Jal Board (DJB) for dredging in the river Yamuna. Under the said agreement, defendant no.1 is the financial partner, whereas defendant no.2 is the technical partner.
3. The defendants entered into the aforesaid agreement dated 14.11.2013 with the plaintiff for the purpose of sale of the dredged sand. The contract provided that the plaintiff shall lift the sand from the site on its own. A supplementary agreement was entered into between the parties on 06.02.2014, modifying some of the terms of the agreement. It appears that the contract worked between the parties for some time. However, on 11.11.2014, defendant no.1 sought to terminate the plaintiffs contract on the premise that it had failed to make payment of substantial amounts of money which were outstanding. At the time when the contract was terminated, the National Green Tribunal (NGT) had injuncted the lifting of sand from the Yamuna river. The said injunction was vacated on 18.05.2015, whereafter the plaintiff filed the present suit to seek specific performance of the aforesaid agreement.
4. On 29.05.2015, this court passed an ex-parte ad-interim order of injunction restraining the defendant not to award the contract in question to any third party. Subsequently, vide order dated 23.11.2015, the said injunction was clarified by observing that defendant nos.1 and 2 shall be at liberty to undertake dredging of the sand at the site on their own, without engaging any third party for the said purpose.
5. The submission of Mr. Basu, learned senior counsel for the plaintiff is that under the original contract, the plaintiff was granted the sole and exclusive right to lift and buy the sand dredged by the defendants. The further submission is that under the said contract, it was provided that the contract shall be co-terminus with the contract entered into between the defendants and the Delhi Jal Board. Mr. Basu submits that this being the position, the contract could not have been terminated earlier, as it was not a terminable contract.
6. Mr. Basu further submits that Yamuna sand is not an easily available commodity and, therefore, the contract can be specifically enforced. He further submits that when defendant no.1 sought to terminate the contract, defendant no.2 was not ad-idem with defendant no.1, and defendant no.2, in fact, protested the said cancellation. In this regard, he has referred to the communication dated 19.11.2014 sent by defendant no.2 communicating its disagreement with defendant no.1 on the said aspect. Another communication was issued by defendant no.2 on 12.01.2015 to the plaintiff, stating that they do not wish to terminate the agreement and defendant no.2 gave its consent to the plaintiff to file a suit for specific performance and perpetual injunction against defendant no.1 to protect rights of the plaintiff and defendant no.2.
7. Mr. Basu submits that under the modified agreement, the plaintiff was obliged to make payment for the purchase of sand to the two defendants – half and half. Thus, defendant no.2 had an economic interest and the termination could not have taken place to their prejudice, without their consent.
8. On the other hand, the submission of Mr. Gupta, learned senior counsel for the defendant no.1 is that merely because the contract between the parties did not provide for terminat
