ADHUNIK STEELS LTD Vs. ORISSA MANGANESE AND MINERALS PVT. LTD This This matt matter er was was in Hon’ Hon’bl blee Supr Suprem emee cour courtt of Indi Indiaa on benc bench h of Just Justic icee H.K. H.K. SEMA SEMA,, P.K. P.K. BALASUBRAMANYAN The following statutory provisions used in the case:Section 9 of Arbitration & conciliation act 1996
Section 9 enables a Court, obviously, as defined in the Act, when approached by a party before the commencement of an arbitral proceeding, to grant interim relief as contemplated by the Section. Illustration I
Mr A is owner of Flat in Amarpali village apartment in Indirapuram, Ghaziabad.Mr B is a tenant of the Flat and rightfully possessing flat. According to the agreement Mr B can posses the flat for next 10 years. Mr A wish to remove Mr B so that Mr A approaches arbitrator on ground of arbitration clause in Contract on few grounds. Then Mr B approaches court for permitting him to reside in the flat till decision declared by arbitration tribunal. This permission of residing into the flat will an interim order which will be passed on basis on section 9 of act o 1996 Illustration II Tinku is a milkman who is producing 100 100 lt of milk every day by keeping their cattles at a primes of MR John which Tinku took it from Mr John on lease of 20 years f or 10 litre of milk per day was consideration of Mr John to give possession to Mr Tinku. After 7 year Mr A send a notice to Tinku to leave premises as early as possible before completion of a month. Then the matter was in front of arbitrator. Tinku approaches court to for permitting him to use and produce cattle feed from land of john which is given to him for next 13 years. So this order of court to permit him for interim injunction till decision comes out by arbitrator. This above example was to explain section 9 of arbitration & conciliation act, 1996. Basically ratio-decidendi or we can say jurisprudence or philoshophy behind providing interim injunction when the matter is going in front arbitrator. Both parties should enjoy benefit & perform the responsibility
1|Page
because nobody can terminate contract before Arbitrators decision if did so then it will be a breach of contract so court will take action of interim injunction. 2. Section 14(3)(c) of specific relief act 1963 The section mainly says about enforcement of contract for specific performance of work which is going on land or construction of building on a particular land.
Illustration I Mr A is holding a property, Mr A transfer the possession of the land to Mr B for 20 years to construct a building and run a school. But due to some reason Mr A filed a suit to stop the construction work,then Mr B pleaded in court of law to allow me me construction work on same land and establish a school. This specific performance of construction of building will be pleaded under section 14(3)(c).
Illustration II Symbiosis law school, Noida entered into a contract for construction of building in Noida. Contractor Mr B was failed to construct the building on specified time period. Though in case court may order to construct the building as early as possible. This order will be granted under section 14(3)(c).
Cases citied 1. Nepa limited v. Manoj kumar agrawal
The Nepa Limited invited tenders in April 1996 for sale of coal ash. The respondent Manoj Agrawal submitted his tender. The offer was accepted and agreement was executed between the parties on 25-10-96. According to the case of the respondent Manoj Agrawal (hereinafter referred to as 'the contractor'), contrary to Clause 4.1 of the contract, the company sent a letter on 28-2-1997 to the contractor compelling him to lift straightway lump sum quantity of 10,000 M.Ts. on payment of full price. It was also threatened that if the quantity was not lifted, it would be disposed of to third parties. The action of the company led to exchange of legal notices between the, parties. Ultimately, on 17-4-97, the contractor approached the Civil Court under Section 9 of the Act of 1996 seeking directions in the nature of injunctions and for preservation of the subject-matter in dispute. Section 9 of the Act of 1996 empowers the Court to take interim measure including, if
2|Page
necessary, of issuing orders of injunction and appointment of receiver for preservation, interim custody or sale of any goods which are subject- matter of the arbitration agreement. 2. Coppee Levalin Nv v Kenren Fertilizers and chemicals 1994
3. Channel Tunnel Group Ltd. and Anr. v. Balfour Beatty Construction Ltd. 1993 AC 334. The trial judge in that case took the view that he had the power to grant an interim mandatory injunction directing the continuance of the working of the contract pending the arbitration. The Court of Appeal thought that it was an appropriate case for an injunction but that it had no power to grant injunction because of the arbitration. In further appeal, the House of Lords held that it did have the power to grant injunction but on facts thought it inappropriate to grant one. In formulating its view, the House of Lords highlighted the problem to which an application for interim relief like the one made in that case may give rise.
4. Fourie v. Le Roux [2007] 1 W.L.R. 320, the House of Lords speaking through Lord Scott of Foscote stated: An interlocutory injunction, like any other interim order, is intended to be of temp duration, dependent on the institution and progress of some proceedings for substantive relief .
Ratio-decidendi (legal principle on which a court gives judgment)
Still legal principle is still the law of land. Principle behind terminating the order of high court Orissa for temporary injunction was basic sense while giving judgement. Supreme terminated interim injunction on ground that if mining will be in hand of the party there will be every possibility to exploitation of resources which may affect parties when possession will be transferred to parties. Ratio decidendi here is if interim injunction will be ordered in favour of Adhunik steels ltd there is every possibility that mining will be explored which may harm Orissa manganese if possession will be transferred .
Ratio decidendi is still law of land, which prevails in India. The precedential value in this case is of wide importance. Permitting the parties for interim authority for exploitation of land when
3|Page
arbitration matter is going on.”No party shall be permitted to exploit resource when matter is going on”
Personal opinion
According to me in case Adhunik steel ltd v. Orissa manganese and mineral Pvt. Ltd judgments given by bench of Justice H.K. SEMA, P.K. BALASUBRAMANYAN was appropriate while giving judgments in this Clause. My view here is clause of arbitration in contract is supreme. Court should not interfere till judgments declared by the Arbitrator. Issue of order to specific performance till matter is disposed will not be an appropriate decision when pecuniary compensation will be right decisions Reasoning behind granting pecuniary compensation if adhunik steel will be permitted to exploit the resources available and when decision will be in favor of Orissa manganese and mineral Pvt Ltd. Then there will be every possibility that mining resources was exploited a lot. So in such situation pecuniary compensation will be a right option rather than order of interim injunction. In my view pleading of Orissa manganese & minerals ltd for termination of Adhunik steel from the mining sight will not be an appropriate measure according to me on ground of rule 37 of the Mineral concession Rules, 1960 will not be taken as a ground for terminating contract. All these issue must be seen by Orissa manganese and mineral ltd before entering into contract. Court also declared that rule 37 of manganese & mineral ltd is not an issue here for termination of contract. Here Second party was trying to terminate the contract to re-enter into contract with third party for higher monetrary benefits. According to there is no ground or there is no breach on the part of Adhunik steel and manganese is not a ordinary article of commerce which easily available in market. So interim injunction will be a right measure which must be taken by Court in favour of Adhunik steel ltd. Because there was no breach on part of Adhunik steel and company already invested lot of money of extraction of mineral which not easily available in the market. Then in this situation permitting Adhunik steel for extraction of mineral till Arbitrator declare in regard to this contract. Abhishek kumar
4|Page
Symbiosis law school, Noida
5|Page
