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IN THE HIGH COURT OF BOMBAY AT GOA APPEAL FROM ORDER NO. 60 OF 2009 M/s. Timblo Private Limited, A Company incorporated under the Indian Companies Act, 1956, having its Office at Kadar Manzil, Margao, Salcete, Goa, through its Managing Director Mrs. Radha Satish Timblo, wife of late Satish Timblo, aged about 54 years, resident of Porvorim, Goa. …... Appellants V e r s u s
1. Smt. Kamalini R. Painguinkar, wife of late Ramakant Painguinkar, aged about 67 years, r/o. Houose no. (not known), Flat no. 1, Ground Floor, Damodar Co-op Housing Society, Aquem Alto, Margao, Salcete, Goa.
2. Shri Raju R. Painguinkar, son of Ramakant Painguinkar, aged about 46 years;
3. Smt. Jyoti Raju Painguinkar, wife of Raju R. Painguinkar, major in age, both residents of B-2, House No. (not known) Virginkar Classic, Nr. Maruti Temple, Davorlim, Margao, Salcete, Goa.
4. Shri Rasik R. Paniguinkar, son of Ramakant Painguinkar, aged about 45 years;
5. Smt. Tanuja Rasik Painguinkar, wife of Rasik Painguinkar, major of age, both residents of Flat no. 1, House no. (not known), Ground Floor, Damodar Co-op Housing Society, Aquem Alto, Margao, Salcete, Goa.
6. Shri Navinchandra Ramakant Katkar, son of Ramakant Katkar, aged about 58 years;
7. Smt. Sandhya Navinchandra Katkar, daughter of Ramakant Painguinkar, aged about 49 years, both residents of House No. (not known), Laxmi Bhuvan, Bandora, Ponda, Goa. …... Respondents A N D APPEAL FROM ORDER NO. 61 OF 2009 M/s. Timblo Minerals Private Limited, A company incorporated under the Indian Companies Act, 1956, having its Office at Kadar Manzil, Margao, Salcete, Goa, through its Director Mr. Arvind Manguesh Hodarkar, son of late Manguesh Hodarkar, aged about 75 years, resident of Margao, Goa. …... Appellants V e r s u s
1. Smt. Kamalini R. Painguinkar, wife of late Ramakant Painguinkar, aged about 67 years, r/o. Houose no. (not known), Flat no. 1, Ground Floor, Damodar Co-op Housing Society, Aquem Alto, Margao, Salcete, Goa.
2. Shri Raju R. Painguinkar, son of Ramakant Painguinkar, aged about 46 years;
3. Smt. Jyoti Raju Painguinkar, wife of Raju R. Painguinkar, major in age, both residents of B-2, House No. (not known) Virginkar Classic, Nr. Maruti Temple, Davorlim, Margao, Salcete, Goa.
4. Shri Rasik R. Paniguinkar, son of Ramakant Painguinkar, aged about 45 years;
5. Smt. Tanuja Rasik Painguinkar, wife of Rasik Painguinkar, major of age, both residents of Flat no. 1, House no. (not known), Ground Floor, Damodar Co-op Housing Society, Aquem Alto, Margao, Salcete, Goa.
6. Shri Navinchandra Ramakant Katkar, son of Ramakant Katkar, aged about 58 years;
7. Smt. Sandhya Navinchandra Katkar, daughter of Ramakant Painguinkar, aged about 49 years, both residents of House No. (not known), Laxmi Bhuvan, Bandora, Ponda, Goa. …... Respondents Mr. V. B. Nadkarni, Senior Advocate with Mr. Y. V. Nadkarni, Advocate for the Appellants.
Mr. S. G. Dessai, Senior Advocate with Mr. C. Mascarenhas, Advocate for the Respondents.
CORAM: A. H. JOSHI, J.
DATE OF RESERVING : 15th September, 2009.
DATE OF PRONOUNCEMENT: 7 th October, 2009 .
['Y V NADKARNI', 'SHIVAN DESSAI CAVEATOR', '', 'CAETANO MASCARENHAS']
JUDGMENT
Learned Advocates appearing for the respective parties have agreed for disposal of both these appeals, finally, at the stage of admission itself.
Background in brief :-
2. Respondents, who are common in both appeals are Mine Owners who are, for the sake of brevity, referred to as Mine Owners.
The appellants are Limited Companies.
Both the appellant-Companies are seen to be belonging to one and the same group of Management/Promoters. Two different contracts are entered by mine owner with these different appellants. These two transactions are in fact a package.
Respective appellants in Appeal no. 61/09 and 60/09 are referred to for the sake of brevity as “Buyer” and “Extractor”.
3. It appears that there are legal impediments in subleasing of the mining licence. Most of the Mine Owners and buyers / extractors have devised modality of entering into two contracts, one with buyer and another with extractor to undertake mining activity and processing. Same modality has been used/adopted in the present case as well.
4. The Mine Owners have been giving the work of extraction and processing to a firm or undertaking, which is a different business organization or to different commercial entity from the Buyer. The ore so extracted and treated is sold to the Buyer already contracted for. A long term arrangement is ordinarily worked out with the extractors and Buyer in the shape of a written contract / agreement.
5. In the suits at hand, the background and the modalities which reveal from record and respective submissions are summarized as follows :
(a) Deployment of Large amount of men machinery, monetary resource and expertise is required to be done for extraction and treatment of the Ore.
(b) Mine Owners normally do not have the arrangement of men Machinery and resource for extraction of the Ore and the treatment thereon.
(c) The Buyer and the extractor therefore, enter into contracts with Mine owners for a long tenure.
(d) The Buyer, therefore, make arrangement of a concern of its business associate to extract the Ore and to do the processing of ore for converting the raw Ore into marketable varieties of Ore.
(e) Such marketable Ore is sold by the Mine Owner to the Buyer.
(f) The Buyer pays to the Mine Owner the agreed price towards the marketable varieties of iron ore.
(g) Mine Owner pays to the extractor the charges towards extraction job work / labour / processing.
(h) Such contracts provide for an exclusive right of extraction and at purchase, in favour of extractor and Buyer.
(i) These contracts also contain a negative covenant operat- ing against the Mine Owner stipulating that during currency of the of the agreed duration for extraction and sale, the Mine Owner is not entitled either to allot the work of extraction or sell the varieties at marketable ore, produced from the Mine to any other person other than the party with whom the agreement had been entered. (j) It is common knowledge that these Agreements that those are replication of practice in vogue.
6. In present case, two separate Agreements were entered on
16.06.2003 by the Mine Owner namely :-
(i) One with appellant in Appeal From Order no. 60/2009 –
the Agreement for extraction; and another (ii) Another with the appellant in Appeal From Order no.
61/2009 – the Agreement for extraction sale.
7. Perusal of the Agreement entered with Buyer reveals that crucial clauses contained therein which govern the subject matter are Clause nos. 4(a), 9 and 22 of the Agreement for Sale. These clauses would be referred to whereever required by quoting those.
8. It appears that parties were under a belief that the first spell of agreed period of five years had to end on 15.06.2008. The appellant-buyer states that it has sent letter dated 19.11.2007 to the Mine Owner, offering / opting to renew and proposing a meeting for that purpose and for signing of agreement.
9. The letter dated 19.11.2007 contains expression of decision to continue to buy under earlier arrangement. It is alleged that this letter was
