IMPORTANT POINTS
(1) Contract pertaining to immovable property cannot be ordered to be enforced specifically.
(2) In a suit for specific performance where compensation is adequate remedy specific performance is not to be ordered.

F.M. Reis, J. —The above Appeal filed under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996, challenges the Judgment and Order dated 29th April, 2009, passed by the learned Principal District Judge, South Goa, Margao, in Arbitration Application no. 7 of 2009 (New) filed by the Respondents under Section 9 of the Arbitration and Conciliation Act, 1996, came to be allowed whereby, inter alia, the Appellants were restrained from in any manner causing interference with or impediment to the work of the Respondents vis-a-vis the refloatation of the vessel undertaken by them under Agreement dated 5th January, 2007, and/or terminating the same; and from making any demand on Respondents and/or taking away by way of damages or otherwise, taking any action in furtherance of the show cause notice dated 5th June, 2008, and from adopting any measures or steps to award the work to any other person or entity until the refloatation of the vessel in question and pending the determination of the issues arising between the parties which are arbitrable before the Arbitral Tribunal. The Respondents are also secured by an order of mandatory injunction directing the Appellants to reimburse the amount of Rs.5,50,00,000/- having earlier come to a conclusion that the Performance Guarantee was wrongly appropriated by the Appellants in encashing the same.

2. The above Appeal has been placed for hearing before the Division Bench in view of the directions of the Hon’ble Chief Justice by intimation dated 16th July, 2010.

3. Briefly, the facts of the case are that the Respondents filed an application for interim orders under Section 9 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as ‘the said Arbitration Act’), claiming that the Respondent is the contractor appointed under an Agreement dated 5th January, 2007, entered into between the Respondents and the Appellants for the removal of the nuisance caused by the grounded/wrecked vessel ‘M. V. River Princess’ off Sinquerim beach, Candolim, Goa, on the terms and conditions mutually agreed upon and stipulated in the said Agreement. It is further their case that pursuant to a tender floated by the Appellants to remove the vessel, the Respondents on 27th February, 2006, submitted its bid no. 6/2(9)(River Princess)2006-DT/ dated 31st January, 2006, which was accepted by the Appellants with certain modifications, culminating in the parties entering into a formal Agreement dated 5th January, 2007, whereby the Respondent was to remove the said vessel at its own risk, liability, costs and consequences by refloatation and towing away wholly to an authorized Ship Breaking Yard. It is further their contention that the work allotted to the Respondents was to be carried out within a period of 180 days and the consideration payable to the Respondents was the ownership and title of the wrecked vessel and the sum of Rs.5,50,00,000/- assured to the Respondents through its bankers as a Performance Guarantee favouring the Appellants to be paid by the Appellants to the Respondents within 7 days of floatation and towing away of the remains of the vessel. It is further their contention that pursuant to the said Agreement and in accordance with the Clauses 1, 5, 7 and 9, they were carrying out and were in the process of completing the said work within the time stipulated therein or within such extended time as was mutually agreed between the parties. The Indian Registrar of Shipping was appointed as a Consultant to make and submit regular status reports on the progress of the work from time to time and the Respondents were supposed to carry out the work as per their directives. It is further their case that the Appellants had not provided them with the general arrangements and the particulars of the grounded vessel thereby admitting that the said vessel was embedded in the sand and consequently the Respondents were facing innumerable difficulties in proceeding with the work assigned to th