2019 Supreme(Mad) 1409

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
R. SUBBIAH, B. PUGALENDHI, JJ.
NLC Tamilnadu Power Limited, a Subsidy of Neyveli Lignite Corporation Limited, Represented by its Chief Executive Officer & Another - Appellant
Versus
M/s. SICAL Logistics Limited, having its registered office at South India House, Rrepresented by its President & Chief Executive Officer, Captain K.N. Ramesh - Respondent
C.M.A.(MD) No. 1181 of 2018 & C.M.P.(MD) No. 12144 of 2018
Decided On : 28-02-2019

Headnote:

Civil Procedure Code,1908 - Order 18 and 43 - Rule 5 - Letter Patents Act - Section 104 - Arbitration and Conciliation Act, 1996 - Sections 9 and 37(1)(b) - Specific Relief Act - Sections 14,14,(b),14(d),41, 41(e), 41 (h) - Companies Act, 1956 - Engaged in operation of coal-based power projects in Tuticorin - Liaisoning movement and handling of coal from Mahanadhi Coal Fields - Public sector undertaking incorporated as a joint venture between second appellant and Tamil Nadu Generation and Distribution Corporation Limited and primarily engaged in operation of coal-based power projects in Tuticorin - Second appellant is a public sector undertaking engaged in business of mining and power generation - It is a public limited company incorporated in year - Respondent is a company incorporated under Companies Act and is engaged in business of providing logistics solutions - On second appellant issued a notice inviting tender for liaisoning movement and handling of coal from Mahanadhi Coal Fields Talcher Orissa to Tuticorin Port in Tamil Nadu via Port Paradip by road Rail-sea route - Tender was issued for transportation of coal to two power generation plants of appellants having capacity of each - On respondent emerging as successful bidder a Letter of Award was issued to respondent by second appellant on behalf of first appellant - Thereafter a contract was entered into between first appellant and respondent for a period of three years for execution of works under contract - Duration of contract was agreed to be for three years from date of confirmation of supply of first consignment of coal by first appellant or months from date of LOA whichever is earlier - Whether appellants can be restrained from proceeding with new tender - In instant case in guise of pendency of arbitration proceedings appellants cannot be restrained from proceeding with fresh tender as subject matter of fresh tender is totally alien to present dispute between appellants and respondent which relates to earlier contract - Whether it has been terminated or threatened to be terminated - Whether contract has been or is likely to be determined/terminated - Whether is date of commencement is an issue to be adjudicated upon by Arbitral Tribunal - Whether term of contract is of prime importance or quantum to be handled is of prime importance - Whether it is transported by respondent or by any other person is not going to make out any difference - Whether coal is supplied by respondent or by some other new agency - whether it expired as contended by appellants or it is subsisting as contended by respondent such a dispute is a question of fact and this Court cannot render any finding on such aspect - Held, Sub-section (1) of Section 14 of Specific Relief Act specifies contracts which cannot be specifically enforced one of which is a contract which is in its nature determinable - In present case it is not necessary to refer to other clauses of Sub-section (1) of Section 14 which also may be attracted in present case since Clause (c) clearly applies on finding read with reasons given in award itself that contract by its nature is determinable - This being so granting relief of restoration of distributorship even on finding that breach was committed by appellant-Corporation is contrary to mandate in Section 14(1) of Specific Relief Act and there is an error of law apparent on face of award which is stated to be made according to law governing such cases - Grant of this relief in award cannot therefore be sustained - This court finding that since there are several issues before Arbitral Tribunal and considering genuine grievance immediate solution before Arbitrators since not possible this court is of considered view existing contract of supplying coal has to be continued for a period of months with quantity as per term of subsisting contract - Both parties shall raise all contentious issues before Arbitral Tribunal - Hence respondents shall maintain status-quo of contract for a period of days from today - Petitioner shall supply coal as per conditions imposed by respondents vide their letter - Having that petitioner is entitled for supplying of coal for months if in interregnum respondents proceeded with tender process and award contract to third parties interim protection given to petitioner would become otiose nugatory - Hence respondents shall not award any contract to new contractors for a period of months - Court are of opinion that respondent sought for an interim mandatory inunctinon to direct continued performance of a contract which according to appellants have expired - Principal District Judge Tuticorin taking note of above submission has granted status-quo of contract in favour of respondent for a period of three months until - In this context reference could be made to Section 14 of Specific Relief Act as amended which provides that certain types or categories of contract cannot be specifically enforced - A contract performance of which involves continuous duty cannot be supervised by Court as contemplated under Section 14 (b) of Specific Relief Act - Similarly a contract which is in its nature determinable cannot be specifically enforced - Section 41 of Specific Relief Act stipulates circumstances in which Court could refuse interim injunction - In other words under sub-section (e) to Section 41 of Specific Relief Act an injunction cannot be granted to prevent breach of a contract performance of which would not be specifically enforced - In this case contract between appellants and respondent is determinable in nature as per Clause of contract whereby appellants have a right to determine contract by causing days notice even without assigning any reasons - While so on a combined reading of Section 14 and 41 (e) of Specific Relief Act relief sought for by respondent is prohibited by statue and it is liable only to be rejected - In such view of matter Tribunal ought not to have granted an interim order preventing appellants from proceeding with new contract in form of an interim injunction - Court find that as there is already an arbitration clause in contract entered into between parties it is for them to adjudicate same before Arbitral Tribunal in manner known to law - Appeal Allowed