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2013 Supreme(Mad) 593

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
T. RAJA, J.

M/s. Energo Engineering Projects Ltd.
Versus
Aishwarya Constructions, Rep. by its Managing Partner, K. Lakshmipathy & Another
C.M.A.(MD).No. 7 of 2013 & M.P.(MD).No. 1 of 2013
Decided On : 28-01-2013

Advocates Appeared:
For the Appellant:G. Prabhu Rajadurai, Advocate.
For the Respondents:R1, M. Vallinayagam, Senior Counsel for K. Samidurai, R2, P.S. Sundaram, Advocates.

The main legal point established in the judgment is that when a contract is determinable, no injunction could be granted, and the parties should approach the Arbitrator to redress their grievance.

Headnote:

Specific Relief Act - Contract Dispute - Section 14(1)(a), Section 41(e) - The court discussed the applicability of Section 14(1)(a) and Section 41(e) of the Specific Relief Act in a contract dispute case. The court highlighted the legal provisions and their interpretations, emphasizing that when a contract is determinable, no injunction could be granted. The court set aside the interim injunction and directed the parties to approach the Arbitrator to redress their grievance.

Fact of the Case:

The case involved a contract dispute between the appellant and the 1st respondent regarding the termination of a sub contract for the construction of a Thermal Power Plant. The trial court had granted an interim injunction in favor of the 1st respondent, which was challenged in the present appeal.

Finding of the Court:

The court found that the trial court erred in granting the interim injunction without considering the arbitration clauses in the agreement and the applicability of Section 14(1)(a) and Section 41(e) of the Specific Relief Act. The court set aside the interim injunction and directed the parties to approach the Arbitrator to redress their grievance.

Issues: The issues revolved around the legality of the interim injunction granted by the trial court, the applicability of arbitration clauses, and the interpretation of Section 14(1)(a) and Section 41(e) of the Specific Relief Act.

Ratio Decidendi: The court's decision was based on the interpretation of the arbitration clauses in the agreement, the principles laid down in Section 14(1)(a) and Section 41(e) of the Specific Relief Act, and the need to protect public interest in the completion of the Thermal Power Project.

Final Decision: The court set aside the interim injunction and directed the parties to approach the Arbitrator to redress their grievance. The appeal was allowed and no costs were imposed.

JUDGMENT

1. The present Civil Miscellaneous Appeal has been filed by M/s.Energo Engineering Projects Ltd., rep. by its Senior Vice President, Mr. Randhir Grover, NTPL Power Plant, Thoothukudi, challenging the impugned order passed by the learned District Court, Thoothukudi, in I.A.No.392 of 2012 in AROP.No.470 of 2012 dated 27.11.2012.

2. The controversy before this Court is when the 2nd respondent, Neyveli Tamil Nadu Power Limited, (hereinafter referred to as NTPL), Thoothukudi, has given a contract in respect of erection/construction of Thermal Power Plant to the appellant, in turn the appellant has given sub contract to the 1st respondent/Sri Aishwarya Constructions, Neyveli. During the execution of the work by the 1st respondent, there was a failure of one of the rafts. In view of that, the 1st respondent was directed to go for core cutting test. In the meantime, the 1st respondent has also submitted payment of bills of which a sum of Rs.16,35,000/- alone was paid. The two number of batching plants were procured by the 1st respondent for which the 1st respondent incurred a cost of Rs.40 lakhs. Complaining that there was a delay in payment of bills, problems were cropped up between the appellant and the 1st respondent, as a result, citing the reason that the 1st respondent has not completed the expected work, the appellant has issued termination letter dated 21.11.2012, terminating the work order given to the 1st respondent. Aggrieved by the same, the 1st respondent has approached the trial Court namely, the District Court, Thoothukudi, by filing a petition in AROP.No.470 of 2012 along with I.A.No.392 of 2012, under Order 39 Rule 1 & 2 of the Civil Procedure Code, taking a main ground that without any prior notice, the order of termination dated 21.11.2012 has been passed arbitrarily, which is impermissible in law. Ultimately, accepting the case of the 1st respondent, the learned trial Court has passed the impugned order dated 27.11.2012, granting three directions namely;

i) Interim injunction was granted till 14.12.2012, restraining the appellant from in any manner giving effect to their notice of termination dated 21.11.2012 pending further orders from the trial court;

ii) A commissioner was appointed by the trial court to find out the extent of the work done by the 1st respondent;

iii) A direction was also issued to withhold a sum of Rs.1,74,00,000/- (Rupees one crore and seventy four lakhs only) from the amount payable to the 1st respondent and deposit the same in the trial court pending arbitration proceedings.

Aggrieved by the said order, the present appeal has been filed.

3. Learned counsel for the appellant would heavily contend that when there is a contract of work by registered agreement dated 17.06.2011 entered into between the appellant and the 1st respondent specifically saying that in case of any dispute or difference of opinion during the course of execution of work, the party aggrieved by the terms and conditions should approach only the Arbitrator, but ignoring the same, the 1st respondent has approached the trial court seeking injunction and the learned trial court also without giving a short notice to the appellant and the 2nd respondent erroneously granted injunction as a result, the work given by the 2nd respondent to the appellant in respect of erection/construction of Thermal Power Plant has been completely jeopardized, due to which, not only the appellant but also the 2nd respondent is put to great prejudice. Besides, since the work which pertains to construction of Thermal Power Plant for the welfare of the state is delayed due to the pendency of the case, the people of this state would also suffer the continuous scarcity of electricity.

4. Secondly, the learned counsel for the appellant contended that when the 1st respondent can adequately be compensated in terms of Section 14(1)(a) of the Specific Relief Act, 1963, the trial court ought not to have granted injunction.

5. Finally, it was cont





















































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