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(2007) 6 MLJ 80 (SC)
IN THE SUPREME COURT OF INDIA
Present : H. K. Sema and P. K. Balasubramanyan, JJ.
Case Number(s) : C.A. No. 6569 of 2005
Judgement Date :
Tuesday 10th of July 2007
| Adhunik Steels Ltd. | .....Appellant(s) | | Versus | | | Orissa Manganese and Minerals Pvt. Ltd. | .....Respondent(s) |
(A) Arbitration And Conciliation Act (26 of 1996 ), Section 9 - Scope - Section 28 - Specific Relief Act (47 of 1963), Section 14(1)(C) - Applicability - Contract between A. S. Ltd and O. M. M. P. Ltd - Said contract containing arbitral clause - Termination of contract by O. M. M. P. Ltd on ground said contract violative of Rule 37, Mineral Concession Rules, 1960 - Application by A. S. Ltd for interim injunction restraining O. M. M. P. Ltd from acting upon letter of termination, allowed by district Court - High Court in appeal holding said case not fit one for grant of interim injunction - Cross appeals - In C. A., A. S. Ltd plea Court could pass order for preservation or custody of subject matter of arbitration agreement - Subject matter of arbitration, continued right of A. S. Ltd to mine and lift ore to surface on behalf of O. M. M. P. Ltd - Power of Court to grant interim protection under Section 9, Act 26 of 1996 - Power under Section 9, of Act not totally independent of well known principles governing grant of interim injunction - Not possible to keep out concept of balance of convenience, prima facie case, irreparable injury and concept of 'just and convenient' - District Court and High Court's conclusion, prima facie, Rule 37, Mineral Concession Rules, not applicable - Said question, to be left open to be decided by arbitration - An interim injunction could be granted against OMM restraining branch of contract - OMM'S reason for cancelling agreement, said agreement hit by Rule 37, M. C. Rules - Clear, OMM cannot enter into similar transaction with any other entity since that would also be apprehended violation of Rule 37 - Hence, just and proper to direct OMM not to enter into similar contract for mining and lifting ore, with any other individual/concern till arbitral proceedings concluded - But no justification for preventing OMM from carrying on mining operations by itself - OMM can hence, on its own, carry on mining operation.
(B) Sp ecific Relief Act (47 of 1963), Sections 36, 38, 39, 40, 41, 42 - Power to grant injunctions by way of specific relief covered by Specific Relief Act, 1963 - As per Section 36, preventive relief may be granted at Court's discretion by temporary or perpetual injunction - Section 42 enables granting of injunction to perform a negative covenant.
Ratio(s) Decidendi
I. "When the stand of O. M. M. P Ltd. is that it was cancelling the agreement mainly because it was hit by Rule 37, Mineral Concession Rules, 1960, it is clear that it cannot enter into a similar transaction with any other entity since that would also be in apprehended violation of above said Rule 37. Hence O. M. M. P Ltd. directed not to enter into similar contract with any other entity until conclusion of arbitral proceedings."
II. "Intention behind Section 9, Arbitration and Conciliation Act, 1996, is the issuance of an order for preservation of the subject matter of an arbitration agreement. Power under Section 9 of the Act not totally independent of the well known principles governing the grant of an interim injunction."
III. "When a party is given a right to approach an ordinary Court of the country without providing a special procedure or a special set of rules in that behalf, the ordinary rules followed by that Court would govern that exercise of power conferred by the Act. Hence, the concept of balance of convenience, prime facie case, irreparable injury and the concept of 'just and convenient' cannot be kept out while passing interim measures under Section 9 of the Act."
IV. "As per clause (e) of Section 41, Specific Relief Act, 1963, no injunction can be granted to prevent the breach of a contract the performance of which be specifically enforced. But, notwithstanding anything contained in Section 41, Section 42 of the Act enables the granting of an injunction to perform a negative covenant."
Cases Referred
Channel Tunnel Group Ltd. and Another v. Balfour Beatty Construction Ltd.
1993 Appeal Cases 334
Coppee Levalin NV v. Ken-Ren Fertilisers and Chemicals 1994 (2) Lloyd's Report 109
Fourie v. Le Roux (2007) 1 W.L.R. 320
Nepa Limited v. Manoj Kumar Agrawal AIR 1999 MP 57
The Siskina 1979 AC 210
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