Injunctions against termination of determinable contracts are not permissible under the Specific Relief Act, reaffirming that disputes should be resolved through arbitration.

JUDGMENT (Pral)

1. Vide the present appeal, the appellant is seeking setting aside of the impugned order/ judgment dated 11.03.2022 passed by the learned Single Judge in OMP(I) (COMM) 79/2022. Pertinently, the said petition was filed by the appellant seeking to restrain the respondent from acting upon letter of termination dated 16.11.2021 issued by the respondent and further consequential measures, which was dismissed by learned Single Judge of this Court observing as under:

"23. Reading of the aforenoted clauses indicates that the Contract is determinable at the option of CWC in the event of breach committed by Shubham. Shubham's prayer restraining CWC from acting upon Termination Notice #3, is not sustainable in law. At this stage, granting stay of termination, would necessarily entail this Court first forming an opinion, albeit a prima facie one, that the termination effected by the Respondent was misconceived and contrary to the terms of the Agreement. Considering the nature and scope of the present proceedings, such an exercise cannot be undertaken by this Court, particularly in light of the settled position in law, repeatedly emphasised by this Court, that it is not permissible for any party to seek an injunction on the termination of an agreement.

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25. That apart, under Section 14(d) read with Section 41 of the Specific Relief Act, 1963, when a contract is determinable, and cannot be specifically enforced, no injunction against termination and enforcement of the contract can be issued. In the present petition, granting such a relief would amount to granting the relief of restoration of SAMA which in other words would amount to enforcement of the contract. The contract being prima facie determinable, grant of such a relief is impermissible in law. Besides, the Court, at this stage, cannot go into the justification of the CWC's action and the same would have to be examined in the ensuing arbitration proceedings that the parties are likely to undertake.

26. Though this petition is liable to be dismissed on the aforenoted grounds alone, nevertheless, the Court has also prima facie examined the merits and the contentions urged by Mr. Uppal.

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34. Before parting, the Court must also note that on 10th February, 2022, CWC issued a fresh tender for appointment of Strategic Alliance Management Operator at Dronagiri Node, and it has reportedly received bids which are to be opened today. Shubham's insistence for stay of the impugned Termination Notice at this juncture would completely upset the entire tender process that CWC has undertaken."

2. Notice issued.

3. Learned counsel for respondent accepts notice.

4. Learned counsel for appellant submits that while passing the impugned order, the learned Single Judge has failed to appreciate that the Strategic Alliance Management Agreement dated 18.04.2020 (SAMA) is determinable at the will of the respondent-Corporation, however, admittedly the impugned termination letter was on the grounds of failure to rectify material breach and thus, the said Agreement was a non-determinable.

5. Learned counsel for appellant further submits that the learned Single Judge while passing the impugned order erred in noting that the appellant herein had not rectified the breach within a period of 30 days from the date of the show cause notice whereas the admittedly the same was not to be rectified within 30 days as admittedly on 02.11.2021 parties had a meeting wherein the appellant had agreed to replenish the bank guarantee.

6. It is further submitted by learned counsel for appellant that learn