2010 Supreme(Gau) 178
GAUHATI HIGH COURT
Anima Hazarika, J.
Finman Finance (India) Pvt.Ltd. -Appellant
Versus
Assam Gas Company Limited -Resopndent
Arbitration Appeal No. 2 of 2008
Decided On : 08-03-2010
Advocates appeared for the Petitioner:Mr.K.Agarwal & Mr.D.K.Chomal, Advocates appeared for the Respondent:Mr.K.H.Choudhury, Sr.Advocate & Mr.Sk.Muktar
Headnote:
Arbitration and Conciliation Act, 1996 - Section 37 (1)(a) - Indian Arbitration Act, 1940 - Civil Procedure Code, 1908 - Section 151 - Interim injunction - Generation of electricity - Appellant is owner of Tea Manufacturing unit under name and style of Tea Factory situated at in district - Appellants company along with seventeen other companies executed an agreement with respondent for availing supply of gas for a period often years under terms and conditions stipulated in said agreement for purpose of consumption of gas in factories including generation of electricity for running factories of companies - Appellant therefore is a Buyer of gas and respondent is Seller of gas as per said agreement - Use of gas for generating electricity by company was noticed by MPGGSA and accordingly it requested respondent to disconnect gas line to appellants generating sets which however was informed vide communication and as such cause of action for initiation of legal proceeding arose and consequently thereupon an application under Section 9 of Act read with Section 151 of Code was filed being Misc. Case on file of District Judge who initially directed respondent to maintain status quo vide order and subsequently rejected same after hearing parties vide order which is under challenge before this Court – Held, In instant case proven facts pleaded and established it would go to show that appellant was not a party included in Annexure-II of agreement executed between parties - In absence of benefit available to appellant in Annexure-II of agreement supply of gas to his generating set would not be available and thus appellant has failed to prove a prima facie case to go for trial - Apart from three basic principles as mentioned hereinabove - There is another factor which is required to be considered in order to get benefit of equity - Admittedly on date of execution of agreement there was no generating set in premises of factory of appellant company which however was installed in year and get electric connection to generating set violating Clause 6 of agreement - Therefore conduct of appellant precluded him to get benefit of equity in matter of granting ad interim injunction and appellant has failed to prove prima facie case in order to get benefit of ad interim injunction - Appeal fails
This appeal being numbered as Arbitration Appeal No. 2 of 2008 has been filed at the instance of the appellant under Section 37 (1)(a) of the Arbitration and Conciliation Act, 1996 ('the Act' for short) questioning the legality and validity of the judgment and order dated 03.01.2008 passed by the learned District Judge, Dibrugarh in Miscellaneous (Arbitration) Case No. 4 of 2007 filed under Section 9 of the Act read with Section 151 of the Code of Civil Procedure, 1908 ('Code' for short) whereby and whereunder the learned District Judge vacated the order of status-quo passed earlier and thereby rejecting the prayer of interim injunction.
2. The facts leading to the filing of this appeal may be summarized as follows:
The appellant is the owner of the Tea Manufacturing unit under the name and style of "Dekhari Tea Factory" situated at Dekhari in the district of Dibrugarh. The appellant's company along with seventeen other companies executed an agreement on 03.12.2002 with the responent for availing supply of gas for a period often (10) years under the terms and conditions stipulated in the said agreement for the purpose of consumption of gas in the factories including the generation of electricity for running the factories of the companies. The appellant, therefore, is a Buyer of the gas and the respondent is the Seller of the gas as per the said agreement. The appellant is also a member of Moran Plantation Gas Grid Suppliers Association (hereinafter referred to as 'MPGGSA' only) who is the confirming party to the said agreement executed on 03.12.2002. But, when the said agreement was executed on 03.12.2002, the company did not have any gas generator for generating electricity and only in the month of March 2007 the company had purchased gas generator sets of total 375 KV capacity, the same was commissioned on 02.05.07 and started using gas for generating electricity for consumption in its factory in terms of unnumbered paragraph 2 of page 2 of the agreement. The appellant by its letter dated 30.5.2007 duly informed the respondent and MPGGSA about its using gas for the purpose of generating electricity from the aforesaid date 02.05.2007. The use of gas for generating electricity by the company was noticed by MPGGSA and accordingly, it requested the respondent to disconnect the gas line to the appellant's generating sets which, however, was informed vide communication dated 01.06.2007 and as such the cause of action for initiation of legal proceeding arose and consequently thereupon an application under Section 9 of the Act read with Section 151 of the Code was filed being Misc. (Arbitration) Case No. 4 of 2007 on the file of the learned District Judge, Dibrugarh, who initially directed the respondent to maintain status quo vide order dated 18.06.2007 and subsequently rejected the same after hearing the parties vide order dated 03.01.2008 which is under challenge before this Court.
3. Referring to the agreement, executed on 03.12.2002, Mr. K. Agarwal, the learned counsel appearing for the appellant has submitted that the unnumbered paragraph 2 at page 2 would show that the respondent (Seller) agreed to supply gas to the Buyer for consumption in the factory as well as for generating electricity for running the factory as mentioned in Annexure-I, II and III (Part of the agreement dated 03.12.2002) and the company consumes the gas in the factory either for running the Dryer Machine, Withering trough or for running the generating sets which are in the factory and not outside the factory and as such the learned trial judge committed an error apparent on the face of the record in rejecting the prayer for interim injunction vide order dated 03.01.2008 which requires interference or else it would cause irreparable loss and injury which cannot be compensated in terms of money.
4. Mr. Agarwal has further contended that there is a clause viz., Arbitration clause being Clause No. 17 of the agreement dated 03.12.2002 whereby i