Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Reserved on: 7 July, 2022
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Pronounced on: 23 August, 2022
+ O.M.P.(I) (COMM.) 192/2022
ROYAL ORCHIDS ..... Petitioner
Through: Mr. Mandeep Singh Vinaik
with Ms. Anjali Sharma,
Mr. Deepak and
Mr. S.K. Sagar, Advocates.
versus
KULBIR SINGH KOHLI & ANR. ..... Respondents
Through: Mr. Kunal Tandon with
Mr. Jaspreet Singh and
Mr. Manu Bhardwaj,
Advocates.
(M): 9650145159
CORAM:
HON'BLE MS. JUSTICE MINI PUSHKARNA
J U D G M E N T
MINI PUSHKARNA, J.
1. The present petition has been preferred by the petitioner under
Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter
called as “Act”), against the respondents seeking urgent interim orders
for protection to preserve the subject matter of arbitration i.e. property
bearing no. K-1, Basaidarapur, Rajouri Garden, New Delhi.
2. As per the petitioner, the parties entered into a MOU dated
03.03.2022, in terms of which the property had to be developed by the
petitioner at its own cost in lieu of being paid 30% of the sale
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SINGH TARIYAL
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proceeds. The petitioner paid an advance sum of Rs. 1 crore to the
respondents and the remaining part of the initial deposit were ready
and available with the petitioner. However, the respondents did not
take the same and began to avoid the petitioner.
3. It is the case of the petitioner that the respondents have been
deferring their obligation under false pretext. The petitioner has got
information that instead of proceeding with their obligations under the
MOU, the respondents are re-negotiating other deals with respect to
the property in question. It is alleged that the respondents are in
breach of the terms of MOU dated 03.03.2022.
4. It is seen from the record that the two respondents are spouses
and are co-owners of the plot of land and in possession of the free
hold property in question. The area of the plot of land is 757.50 sq
yds. It is the case of the petitioner that being interested in engaging the
services of a reputable builder, the respondents reached out to the
petitioner and expressed a desire to collaborate in the construction and
development of the project, which is subject matter of the present
proceedings.
5. Thus, a Memorandum of Understanding dated 03.03.2022
(hereinafter called “MOU”) was entered into between the parties. The
salient features of this MOU were that in consideration of getting 30%
of total sale consideration of the resultant product and infrastructure
facility, the petitioner would employ its technical expertise and
resources and would bear the cost of construction and development of
the property in question.
6. It was the understanding in the MOU that an initial amount of
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Rs. 1 crore would be paid by the petitioner to the respondents. The
respondents had taken a loan against the security of the subject
property from Yes Bank Ltd. and the balance payable was a sum of
Rs. 40, 291, 247.61/-. It was the understanding that the sum payable to
Yes Bank Ltd. would be paid by the petitioner and adjusted in the
amounts payable as initial amounts to the respondents.
7. Thus, the petitioner has contended that the petitioner paid a sum
of Rs. 1 crore as per understanding of the respondents, which amount
was duly encashed by the respondents. As per the petitioner, it has at
all times been ready and willing to pay the balance amount in
accordance with the MOU. Infact, the petitioner had caused to be
prepared, cheques for the balance amount payable by way of initial
amount from its bankers. It is the case of the petitioner that at that
point of time, the petitioner had adequate balance in its accounts to
make the said payment.
8. As per the petitioner, it was the understanding that respondent
no. 1 would personally visit the office of the petitioner to collect the
said cheques. However, on being notified that the said cheques were
ready, respondent no. 1 began to state that he was suffering from high
blood pressure and that he had been advised to rest for some time.
9. It is, thus, submitted on behalf of the petitioner that the
respondents avoided their obligations under false pretext. In the
meanwhile, the partners of the petitioner firm got information that the
respondents were re-negotiating other deals with other builders. On
getting to know the plans on the part of the respondents, petitioner
caused to be issued a letter dated 27.05.2022 through its advocate,
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calling upon the respondents to fulfil their part of the contract. In
reply, respondents sent a letter dated 29.05.2022.
10. Thus, as per the petitioner, the respondents have a clear intent to
commit breach of their obligations of MOU, which is a binding
contract between the parties, and on which the petitioner has already
acted to its financial detriment. The petitioner states that in pursuance
of the execution of the said MOU, it had already caused to be
mobilised, various resources both in terms of manpower, finance,
equipment and material. As per the MOU, the last date for compliance
of their obligations by the respondents was 30.05.2022. While the
petitioner has been demonstrating its readiness and willingness to
fulfil its obligations, the respondents have avoided to comply with the
terms of the MOU.
11. It is envisaged in the MOU that all disputes pertaining to the
agreement shall be referred to an arbitrator appointed under the Act.
Clause 21 of the said MOU reads as follows:-
“21. That any disputes pertaining to this Agreement shall
be referred first to an Arbitrator appointed under the
Arbitration and Conciliation Act and thereon the Courts at
New Delhi shall have exclusive jurisdiction to the subject
matter of this Memorandum of Understanding.”
12. Being faced with breach of contract on the part of the
respondents, the petitioner has invoked arbitration and has issued a
notice to the respondents and their advocate vide letter dated
04.06.2022 seeking appointment of an arbitrator.
13. Thus, it is the contention of the petitioner that the petitioner has
a right vested in it to proceed with the work envisaged under the MOU
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and to complete the project as envisaged. It is contended that the size,
location and nature of the plot as being one of a particular size and its
free hold nature, make this site unique and special. If the petitioner is
wrongfully deprived of this project, there will not exist any measure to
compute any accurate damages that might be suffered. It is contended
that the petitioner is entitled to seek a decree or award directing
specific performance of the said MOU and an award directing the
respondents to ensure full compliance of their obligations. Hence, it is
prayed that an injunction may be granted restraining the respondents
from selling, alienating or creating any third party interest in the land
which was to be used for developing the project in question. If the
subject matter is not secured, the petitioner will suffer grave harm and
loss.
14. On the other hand, on behalf of the respondents, it is contended
that the present petition is not maintainable as the MOU executed
between the parties is in its nature determinable and hence cannot be
specifically enforced as per Section 14(d) of the Specific Relief Act,
1963. The MOU is a revocable agreement.
15. It is contended that the MOU is in the nature of a private
commercial transaction, as the said MOU pertains to a construction
and re-development contract between two private parties. Thus, even
in the absence of a specific clause authorising and enabling either
party to terminate the agreement in the event of happening of an event
specified therein, in a private commercial transaction, the agreement
can be terminated without assigning any reason by serving a notice or
otherwise. At the most, if the termination is found to be bad in law for
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any reason, the remedy would be to seek compensation for wrongful
termination.
16. It is further contended on behalf of the respondent that as per
Section 14(b) of the Specific Relief Act, the performance of an act,
which involves the performance of a continuous duty which the court
cannot supervise, cannot be specifically enforced. A bare perusal of
the MOU shows that it casts a continuous duty upon the petitioner to
perform the services, which the court cannot supervise, and thus,
cannot be specifically enforced.
17. It is further the case of the respondents that injunction prayed
cannot be granted as the performance of the MOU cannot be
specifically enforced. Learned counsel appearing for the respondents
relies upon Section 41(e) of the Specific Relief Act, 1963 to contend
that no injunction can be granted to prevent breach of a contract, the
performance of which would not be specifically enforced. It is
submitted that the MOU executed between the parties is a contract
which is in its nature determinable.
18. It is further submitted on behalf of the respondents that the
petitioner is guilty of material breach of the conditions of the MOU.
As per Clause 3 of the MOU, the petitioner was obligated to deposit
Rs. 5 crores with the respondents as interest free refundable security
deposit, in order to enable the respondents to clear their loan pending
with Yes Bank Ltd. Out of the said amount of Rs. 5 crores, the
petitioner only deposited Rs. 1 crore. The balance of Rs. 4 crores had
to be deposited by the petitioner in the following manner i.e. Rs. 1
crore by 30.04.2022 and Rs. 3 crores by 15.05.2022. However, the
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petitioner failed to deposit the same as per the agreed timelines. After
30.04.2022, when the petitioner failed to make payment of Rs. 1 crore,
the respondents categorically reminded the petitioner of its obligations
to pay the balance amount of security deposit under the MOU. The
petitioner, however, ignored the requests and reminders of the
respondents.
19. As per the respondents, even after 15.05.2022, no amount was
deposited by the petitioner. The respondent no. 1 therefore, met
partners of the petitioner on two occasions, one at Malcha Marg at
their residence and then at the residence of the respondents in Rajouri
Garden, and requested them to pay the balance amount towards the
security deposit.
20. The respondents kept on following up with the petitioner for
payment. Subsequently, on 23.05.2022, the petitioner sent a whatsapp
message to respondent no. 1 with photographs of three post dated
cheques of 28.05.2022 issued in the name of respondent no. 2
amounting to Rs. 50 lakh each, which made it clear that even on
23.05.2022, the petitioner did not have the readiness to make payment
of the balance security deposit of Rs. 4 crores. The respondent no. 1
replied stating that the petitioner had failed to make payment as per
the agreement, which was due on 30.04.2022 and 15.05.2022, to
which there was no response from the petitioner.
21. Since time was of the essence and the parties had to perform the
same strictly in accordance with the timelines contained in the
agreement, the respondents were constrained to terminate the
agreement vide their notice dated 29.05.2022. It is submitted on behalf
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of the respondents that the failure of the petitioner to deposit the
balance amount of security deposit of Rs. 4 crores within the agreed
timeline, amounted to material breach of the terms of the agreement.
Hence, the respondents were entitled to terminate the agreement.
Since the agreement has been terminated by the respondents, the
petitioner cannot seek specific performance of a terminable
agreement, which is a private commercial transaction.
22. In rejoinder, it is submitted on behalf of the petitioner that
Clause 1 of the MOU is akin to an agreement to sell immovable
property, and is much more than any other collaboration agreement. In
effect, what has been agreed upon is to sell 30% of the entire property
that is to be created after construction. It is, thus, contended that since
the petitioner was to become owner of 30% of the facility being
constructed, the interest free security deposit would be refunded to the
petitioner, in terms of para 4 of the MOU.
23. It is contended that the intent of the parties was to create rights
over the immovable property in favour of the petitioner. The same is
manifest from the fact that not only was the possession being handed
over, the respondents were to execute a general power of attorney
empowering the petitioner to get the plans sanctioned and to do
general management of the property. Handing over possession and
executing a power of attorney, is evidence of the said arrangement
being an agreement to sell. Copies of entire chain of title of the papers
was handed over to the petitioner, which is a feature of an agreement
to sell. Even the brokerage is to be shared by both the parties in their
respective ratio of 70:30 in terms of Clause 19(d) of the MOU. The act
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of sharing brokerage is indicative of ownership to the extent of 30%.
24. It is further submitted on behalf of the petitioner that there is not
a single stipulation that permits the respondents to terminate. Even the
petitioner is not permitted to terminate. Even if the petitioner delays in
the performance of its obligations, the consequences are not
termination at all. This contract is not terminable at the option of the
respondents and creates proprietary rights in favour of the petitioner.
25. It is contended on behalf of the petitioners that specific
performance of collaboration agreements is allowed. There is a valid
arbitration clause that covers the dispute between the parties. The
dispute raised is arbitrable and within the scope of the arbitration
agreement.
26. In support of their submissions, learned counsels appearing for
the petitioner have relied upon the following judgments:-
“1. Sushil Kumar Agarwal Vs Meenakshi Sadhu &
Others , ( 2019) 2 SCC 241 .
2. Overnite Express Vs Delhi Metro Rail
Corporation, (2020) 271 DLT 422 : (2020) SCC OnLine
Del 2093.
3. Sitac Private Limited Vs Banwari Lal Sons Private
Limited & Others, 2019 SCC Online Del 9044.
4. Booz Allen and Hamilton INC Vs SBI Home
Finance Ltd & Ors., (2011) 5 SCC 532.
5. Deccan Paper Mills Company Limited Vs Regency
Mahavir Properties & Others (2021) 4 SCC 786 .”
27. I have given my thoughtful consideration to the submissions
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made on behalf of both the parties and perused the documents on
record.
28. At the outset, it would be useful to discuss the relevant clauses
of the MOU, as below:-
i. Clause 1 of the MOU provides that consideration of
bearing the cost and burden of construction and re-
development, is a flat fee of 30% of the total receivables
from the sale of floors.
ii. Clause 3 and 4 provide that since there is a loan against
the property, the petitioner has agreed to provide an
interest free refundable security deposit of Rs. 5 crores to
the respondents.
iii. Clause 5 provides that the respondents shall vacate the
property on or before 30.05.2022, and handover the
possession of the property to the petitioner for
commencement of construction.
iv. Clause 6 specifies that the vacant possession will only
be granted for the purpose of demolition and construction
of the new development.
v. Clause 7 provides that the respondents shall execute the
Power of Attorney in favour of the petitioner, to file the
application in various Government authorities to get plan
sanctioned, electricity connection, water connection etc.,
from time to time.
vi. Clause 11 provides that in the interim period from
completion till sale, if any, the respondents shall assume
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responsibility of discharge of such taxes in respect of
unsold units/floors.
vii. Clause 19(h) provides that Capital Gains Tax and
Income Tax on the sale of floors, shall accrue only to the
respondents and the petitioner shall not bear the same.
29. A perusal of the aforesaid clauses of the MOU categorically
point out that there is no portion of the property, which accrues in
favour of the petitioner. The entire rights in the property, including
possession and right to sell, remain with the respondents. The
possession of the petitioner is only constructive for the purposes of
construction. The Power of Attorney is also given for limited purposes
of achieving construction. The cost of construction is provided in the
MOU. It is also clear from the MOU that all taxes including Capital
Gain Tax have to be borne by the respondents.
30. Considering the relevant clauses of the MOU dated 03.03.2022
between the parties, it is clear that the said MOU is nothing but a pure
construction agreement. No ownership rights were to be acquired by
the petitioner under the MOU. None of the incidences of ownership in
the subject property, as laid down by Hon’ble Supreme Court in the
case of Sushil Kumar Agarwal Vs Meenakshi Sadhu and Ors. ,
(2019) 2 SCC 241, are present in the MOU in question. In the said
case of Sushil Kumar Agarwal (supra), Hon’ble Supreme Court has
categorically held that Courts do not normally order specific
performance of a contract to build or repair.
31. As regards the contention of the petitioner that he has been
ready and willing to perform its obligations under the MOU, the same
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is not tenable. As noted from the documents on record, the petitioner
was obligated to pay Rs. 1 crore on 30.04.2022 and Rs. 3 crores on
15.05.2022, as the last date of handing over possession was
30.05.2022. The termination letter dated 29.05.2022 issued on behalf
of the respondents clearly refers to two meetings between the parties.
It is categorically submitted on behalf of the respondents that they
requested the petitioner to make the balance payment towards the
interest free security deposit and that the petitioner failed to make both
these payments. It is also averred on behalf of the respondents that on
23.05.2022, the respondent no. 1 sent a whatsapp message to the
petitioner stating that it had failed to make the payment as per the
MOU. In response, the petitioner sent photos of three post dated
cheques of 28.05.2022 to respondent no. 1 through whatsApp. The
screen shot of the said whatsApp exchange between the petitioner and
respondent no. 1 has been duly filed on behalf of the respondents.
Thus, it is clear that the petitioner is guilty of non-payment of the
requisite amounts within the time granted.
32. A reading of the MOU manifests that time was essence of the
agreement between the parties. Thus, the petitioner was obligated to
make the payment within the stipulated time. Reference in this regard
may be made to the judgment in the case of P.R. Deb and Associates
Vs Sunanda Roy , (1996) 4 SCC 423, wherein Hon’ble Supreme Court
has held as follows:-
“ 7. Under the agreement of sale dated 24-10-1977, the
respondent was required to make part payment of Rs 4
lakhs within five months of the agreement of sale. The
agreement has clearly provided that this payment is not by
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way of earnest money but it is part payment of the
purchase price. The purpose of this payment is clearly set
out in the appellant's solicitor's letter dated 12-4-1978
addressed to the respondent's solicitors. Early payment of
the amount of Rs 4 lakhs was required as the appellant had
to purchase alternative residential accommodation for
herself in order to carry out her obligation under the
agreement of sale to deliver vacant possession of the
property to the respondent except for the four shops set out
in the said agreement. By her solicitor's letter of 12-4-
1978, the appellant had also made it clear that she
requires payment of Rs 4 lakhs for this purpose and gave
notice to the respondent to pay this amount within a week
of the said letter since the time for payment had already
expired. Clearly, payment of Rs 4 lakhs within a
reasonable time was an essential term of the contract.
Because a late payment of this amount may affect the
appellant's right to obtain suitable alternative residential
accommodation; property prices may increase, thus
affecting the appellant's right to purchase a suitable
residential accommodation. From the reply which has
been sent by the respondent's solicitors, especially the
reply dated 25-9-1980, it is quite clear that the respondent
was not in a position to pay the sum of Rs 4 lakhs either
within the time specified in the agreement of sale or within
a reasonable time. In fact, he has clearly set out in the said
letter that unless he is able to enter into a suitable
arrangement with a cooperative housing society, he will
not be able to pay Rs 4 lakhs to the appellant. He has
insisted, therefore, on the appellant first entering into an
agreement with a proposed housing society which,
admittedly, never came into existence. There is nothing in
clause 11 of the agreement of sale which requires the
appellant to enter into an agreement with a proposed
cooperative housing society as a condition precedent to
receiving part payment of the sum of Rs 4 lakhs. Clause 11
is independent of the right of the appellant to receive a
sum of Rs 4 lakhs. The agreement specifies the time within
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which the sum of Rs 4 lakhs was to be paid and the
correspondence makes it quite clear that the respondent
was not in a position to pay this amount within the agreed
period or within any reasonable time thereafter because he
had, in turn, to collect this amount from the expected
members of the proposed cooperative housing society.
There is no evidence in this case to show whether there
were any members of this proposed cooperative housing
society and whether the respondent was in a position to
collect this amount of Rs 4 lakhs. In fact, the evidence is to
the contrary. The proposed cooperative housing society
was never registered and there is nothing to show that
there were any members of this proposed cooperative
housing society. Although the respondent and his solicitor
have given evidence in the case, they have not stated that
the respondent had the sum of Rs 4 lakhs at the material
time or that the respondent was in a position to pay this
amount within a reasonable time. There is nothing in the
agreement requiring the appellant to enter into an
agreement with the proposed cooperative housing society
before the sum of Rs 4 lakhs is released to her. The trial
court, therefore, had rightly come to the conclusion that
the respondent-plaintiff was not in a position to carry out
the terms of agreement of sale. The plaintiff, in a suit for
specific performance, must be ready and willing to carry
out his part of the agreement at all material times. Such is
not the case here. In fact, even after the decree of specific
performance, the respondent was not able to deposit the
amounts specified by the High Court within the time
prescribed. Ultimately he applied for extension of time for
deposit of amount which application was rejected.
8. In the case of Chand Rani v. Kamal Rani [(1993) 1 SCC
519] a Bench of five Judges of this Court considered a
similar situation, where the contract stipulated that a sum
of Rs 98,000 would be paid by the purchaser to the vendor
within a period of ten days only. Despite notices of the
vendor, the vendee was not willing to pay the said amount
unless vacant possession of a part of the property was
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given by the vendor to the vendee. The Court said that in
view of the express terms of the contract coupled with the
conduct of the vendee, it was clear that the time was of the
essence of the contract and the vendee was not ready and
willing to perform the contract. In these circumstances,
this Court upheld the refusal of the High Court to grant
specific performance. This Court has observed that
although in the case of a sale of immovable property time
is not of the essence of the contract, it has to be
ascertained whether under the terms of the contract, when
the parties named a specific time within which completion
was to take place, really and in substance it was intended
that it should be completed within a reasonable time. It
observed that the specific performance of a contract will
ordinarily be granted, notwithstanding default in carrying
out the contract within the specified period, if having
regard to the express stipulations of the parties, nature of
the property and the surrounding circumstances, it is not
inequitable to grant the relief. If the contract relates to
sale of immovable property, it would normally be
presumed that the time was not of the essence of the
contract. But even if it is not of the essence of the contract,
the Court may infer that it is to be performed in a
reasonable time if the conditions of the contract so
warrant. These can be inferred, (1) from the express terms
of the contract; (2) from the nature of the property and (3)
from the surrounding circumstances. For example, the
object of making the contract may make it clear that the
agreement requires to be performed within a reasonable
time. The Court said that the stipulation in the contract
regarding payment of Rs 98,000 within a period of ten
days only showed that the failure to pay the amount within
the stipulated period would constitute a breach of contract.
9. The present case is similar. The clause relating to
payment of various amounts under the contract including
the sum of Rs 4 lakhs states that the time is of the essence.
Moreover, by his letter of 12-4-1978, also the appellant
has made payment of Rs 4 lakhs within a period of seven
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days from the date of notice, of the essence of the contract
pointing out the circumstances which require payment of
Rs 4 lakhs within a reasonable time. As the respondent did
not comply and was unwilling and/or unable to comply
with this term of the agreement, he cannot be considered
as ready and willing to perform his part of the contract .”
33. Reference to Section 16(c) of the Specific Relief Act shows that
the said section provides that specific performance of a contract
cannot be enforced in favour of a person who fails to prove that he has
performed or has always be ready and willing to perform the essential
terms of the contract, which are to be performed by him. This Court is
of the prima facie view that the petitioner has failed to prove that it
was ready and willing to perform its obligations under the MOU at the
relevant time. There is nothing on record to demonstrate that the
petitioner had the relevant balance in its account at the relevant time to
make payment to the respondents.
34. As regards the contention of the petitioner that the MOU is not
a determinable contract, the said contention has to be rejected in view
of the fact that the MOU being a private commercial transaction, from
the very nature of the agreement, the same could be terminated. The
MOU dated 03.03.2022 executed between the parties is a construction
and re-development agreement. It is a commercial transaction between
two private parties and hence the same is by its very nature
determinable, even if there is no termination clause in the MOU.
Reference in this regard may be made to the case of Rajasthan
Breweries Limited Vs The Stroh Brewery Company , 2000 (55) DRJ
(DB) 68: 2000 SCC OnLine Del 481, wherein this Hon’ble Court has
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held as follows:-
“In view of long catena of decisions and consistent view of
the Supreme Court, I hold that in private commercial
transaction the parties could terminate a contract even
without assigning any reason with a reasonable period of
notice in terms of such a Clause in the agreement. The
submission that there could be no termination of an
agreement even in the realm of private law without there
being a cause or the said cause has to be valid strong
cause going to the root of the matter, therefore, is
apparently fallacious and is accordingly, rejected.”
Even in the absence of specific clause authorising and
enabling either party to terminate the agreement in the
event of happening of the events specified therein, from the
very nature of the agreement, which is private commercial
transaction, the same could be terminated even without
assigning any reason by serving a reasonable notice. At
the most, in case ultimately it is found that termination was
bad in law or contrary to the terms of the agreement or of
any understanding between the parties or for any other
reason, the remedy of the appellants would be to seek
compensation for wrongful termination but not a claim for
specific performance of the agreements and for that view
of the matter learned Single Judge was justified in coming
to the conclusion that the appellant had sought for an
injunction seeking to specifically enforce the agreement.
Such an injunction is statutorily prohibited with respect of
a contract, which is determinable in nature. The
application being under the provisions of Section 9(ii)(e)
of the Arbitration and Conciliation Act, relief was not
granted in view of Section 14(i)(c) read with Section 41 of
the Specific Relief Act. It was rightly held that other
clauses of Section 9 of the Act shall not apply to the
contract, which is otherwise determinable in respect of
which the prayer is made specifically to enforce the same .”
35. The MOU being determinable in nature in view of the aforesaid
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discussion, the same is not capable of specific performance due to the
statutory bar contained in Section 14(d) of the Specific Relief Act.
Thus, in terms of Section 41(e) of the Specific Relief Act, no
injunction can be granted to prevent breach of a contract, the
performance of which cannot be enforced. As noted above, the
respondents had already terminated the MOU vide their notice dated
29.05.2022, hence, the remedy available with the petitioner is to seek
damages, if any. Thus, when the petitioner is statutorily barred from
seeking specific performance of the MOU, the petitioner cannot be
held entitled to any interim relief under Section 9 of the Act.
36. Reference may be made to the case of Bharat Catering
Corporation Vs Indian Railway Catering and Tourism Corporation
Ltd. (IRCTC) and Anr. , 2009 (113) DRJ 435 (DB): 2009 SCC Del
3434, wherein this Hon’ble Court has held as follows:-
“17. Apart from merits, even otherwise, in our view, the
scope and ambit of Section 9 do not envisage the
restoration of a contract which has been terminated. The
learned Single Judge, in our view, rightly held that if the
petitioner is aggrieved by the letter of termination of the
contract and is advised to challenge the validity thereof,
the petitioner can always invoke the arbitration clause to
claim damages, if any, suffered by the petitioner. It is not
open to this Court to restore the contract under Section 9,
which is meant only for the sole purpose of preserving and
maintaining the property in dispute and cannot be used to
enforce specific performance of a contract as such. A bare
glance at the said Section will suffice to show that pending
arbitration proceedings, the Court and the Arbitral
Tribunal have been vested with the power to ensure that
the subject matter of the arbitration is not alienated or
frittered away. The provisions of Section 9, for the sake of
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convenience, are extracted below:-
"9. Interim measures, etc. by Court .- A party may, before
or during arbitral proceedings or at any time after the
making of the arbitral award but before it is enforced in
accordance with section 36, apply to a court-
(i) for the appointment of a guardian for a minor or a
person of unsound mind for the purposes of arbitral
proceedings; or
(ii) for an interim measure of protection in respect of any
of the following matters, namely:-
(a) the preservation, interim custody or sale of any
goods which are the subject-matter of the
arbitration agreement;
(b) securing the amount in dispute in the
arbitration;
(c) the detention, preservation or inspection of any
property or thing which is the subject-matter of the
dispute in arbitration, or as to which any question
may arise therein and authorising for any of the
aforesaid purposes any person to enter upon any
land or building in the possession of any party, or
authorising any samples to be taken or any
observation to be made, or experiment to be tried,
which may be necessary or expedient for the
purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a
receiver;
(e) such other interim measure of protection as may
appear to the court to be just and convenient,
and the Court shall have the same power for making
orders as it has for the purpose of, and in relation to, any
proceedings before it.”
37. In view of the discussion hereinabove, the petitioner is not
entitled to the reliefs sought for.
38. The contentions of the parties as regards the breach of the terms
of the MOU, are issues that will be decided by the arbitral tribunal, as
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and when constituted.
39. It is made clear that this Court has not expressed any opinion on
the merits of the disputes. All rights and contentions of the parties are
left open for consideration by the learned sole arbitrator.
40. The petition is accordingly dismissed.
(MINI PUSHKARNA)
JUDGE
rd
August 23 , 2022
PB/c
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