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IN THE HIGH COURT OF RAJASTHAN AT JAIPUR BENCH
VEERENDER SINGH SIRADHANA, J.
Yogesh Chaudhary – Appellant
Vs.
State of Rajasthan and Ors. – Respondents
S.B. Civil Miscellaneous Appeal No. 5183 of 2016
Decided On : 13-12-2016
CONTRACT - BREACH - TEMPORARY INJUNCTION - PRIMA FACIE CASE - LIMITATION - ARBITRATION - PARTNERSHIP - SECTION 80 CPC - SECTION 31 RAJASTHAN AGRICULTURAL PRODUCE MARKETS ACT, 1961 - SECTION 69 INDIAN PARTNERSHIP ACT, 1932 - SECTION 14 LIMITATION ACT, 1963 - SECTION 7 ARBITRATION AND CONCILIATION ACT, 1996 - Whether the trial court erred in declining the application for temporary injunction without considering the prima facie case, balance of convenience, and irreparable loss? Whether the suit is barred by limitation? Whether the dispute is arbitrable? Whether the partnership act bars the trial of issues of facts as a preliminary issue?
Fact of the Case:
Plaintiff-appellant submitted a bid for the construction of a wall and check-post at a terminal market. An agreement was executed between the parties, but the work order was issued late. The plaintiff-appellant claimed that the defendant-non-appellants infringed the agreement by not providing the layout plan within the agreed time. The plaintiff-appellant declined to proceed further and initiated proceedings under the agreement. The plaintiff-appellant also challenged the recovery order issued by the non-appellants. The trial court declined the plaintiff-appellant's application for a temporary injunction.
Finding of the Court:
The trial court erred in declining the application for temporary injunction without considering the prima facie case, balance of convenience, and irreparable loss. The suit is not barred by limitation as the plaintiff-appellant can invoke Section 14 of the Limitation Act, 1963. The dispute is not arbitrable as the agreement does not contain an arbitration clause. The partnership act does not bar the trial of issues of facts as a preliminary issue.
Issues: 1. Whether the trial court erred in declining the application for temporary injunction without considering the prima facie case, balance of convenience, and irreparable loss? 2. Whether the suit is barred by limitation? 3. Whether the dispute is arbitrable? 4. Whether the partnership act bars the trial of issues of facts as a preliminary issue?
Ratio Decidendi: 1. The trial court erred in declining the application for temporary injunction without considering the prima facie case, balance of convenience, and irreparable loss. The trial court should have considered the factual matrix and the rival contentions of the parties to determine whether a prima facie case existed in favor of the plaintiff-appellant. 2. The suit is not barred by limitation as the plaintiff-appellant can invoke Section 14 of the Limitation Act, 1963. The plaintiff-appellant was pursuing other legal remedies, which resulted in a delay in filing the suit. 3. The dispute is not arbitrable as the agreement does not contain an arbitration clause. The court held that Clause 23 read with Clause 51 of the agreement could not be construed as an arbitration clause or an arbitration agreement as contemplated under Section 7 of the Arbitration and Conciliation Act, 1996. 4. The partnership act does not bar the trial of issues of facts as a preliminary issue. The court held that Section 69 of the Indian Partnership Act, 1932, cannot be construed to prevent the mandated procedure of trial of all issues together and non-trial of issues of facts as a preliminary issue can be given a go-bye.
Final Decision: The impugned order dated 7th September, 2016, is quashed and set aside. The application under Order 39 Rule 1 and 2 read with Section 151 CPC, is hereby restored. The trial Court is directed to reconsider the matter and pass an order addressing on the settled principles while considering the application for grant of Temporary Injunction under Order 39 Rule 1 and 2 CPC.
Veerender Singh Siradhana, J.
1. By order dated 7th September, 2016, the trial Court declined the application of the plaintiff-appellant under Order 39 Rule 1 and 2 read with Section 151 CPC; of which the plaintiff-appellant is aggrieved of.
2. Briefly, the essential skeletal material facts are that the plaintiff/appellant, in response to a tender notice issued by the defendant-non-appellants, submitted his bid for construction of the wall along with check-post at Terminal Market, Muhana, Jaipur. It is pleaded case of the plaintiff-appellant that despite an agreement executed between the parties on 28th April, 2004; the work order was issued to the appellant-firm only on 24th August, 2004. The appellant was required to complete the construction in an area of 3400 mtrs. by 2nd January, 2005. The lay-out plan for construction work was to be provided within ten days, as contemplated in the order/communication dated 24th August, 2004, but the lay-out plan was provided only for 500 mtrs., and thus, the defendant-non-appellants infringed the condition No. 2 of the agreement. The plaintiff-appellant-firm, vide communication dated 4th December, 2004, informed the non-appellants of the infringement and failure to provide lay-out plan within the agreed time period. Though, the non-appellants undertook to furnish the lay-out plan by 11th December, 2004; however, the appellant-firm, vide communication dated 12th January, 2005, declined to proceed further on account of expiry of the term of contract and for not providing the lay-out plan.
3. Learned counsel for the plaintiff-appellant, reiterating the pleaded facts and grounds of the memo of appeal, asserted that non-appellant No. 4, while addressing a communication dated 20th January, 2005, to non-appellant No. 5; admitted the fact that the layout plan was not provided to the plaintiff-appellant, within the stipulated time as per agreement.
4. According to the learned counsel for the appellant, proceedings initiated under Clause 2 of the agreement, vide notice dated 25th February, 2005, were made subject matter of challenge in SBCWP No. 2238/2004, instituted before this Court. The writ application was disposed off, requiring the plaintiff-appellant to approach the respondents through a representation. A detailed representation was addressed on 8th April, 2005, but the non-appellants turned a deaf ear and instead of deciding its representation, issued an order for the recovery of Rs. 3,71,846/-, which was made subject matter of challenge in SBCWP No. 3487/2006. An interim stay order was granted on 1st May, 2006 in the writ proceedings, which continued till 11th September, 2014, for the plaintiff-appellant was directed to approach the Standing Committee in view of contemplation under Clause 23 of the agreement and the writ petition was disposed off accordingly vide order dated 11th September, 2014.
5. It is further asserted that order dated 11th September, 2014, was assailed before the Division Bench in an intra-court appeal, which was disposed off on 6th January, 2016, observing that Clause 23 read with Clause 51 of the agreement could not be construed to be an arbitration clause or an arbitration agreement as contemplated under Section 7 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act of 1996').
6. The appeal was dismissed as withdrawn with liberty reserved to the plaintiff-appellant to avail remedy available to him in accordance with law. As regards limitation, the Division Bench observed that the appellant would be at liberty to invoke Section 14 of the Limitation Act, 1963, and in case, an application was so instituted, the competent authority was expected to consider the same sympathetically.
7. Learned counsel further urged that the trial Court, while declining the application of the plaintiff-appellant, has not recorded any finding as to first principle i.e. existence of a prima facie case as has been held by the Apex Court of the land in catena of judgments.
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