Bangalore District Court
Automotive Axles Limited vs Mullur Solar Parks Private Ltd on 23 November, 2021
1 Com.A.A.No.134/2021
IN THE COURT OF THE LXXXVIII ADDL. CITY CIVIL &
SESSIONS JUDGE (EXCLUSIVE COMMERCIAL COURT):
BENGALURU CITY. (CCH-89)
Present: Sri. P.J. SOMASHEKARA, B.A.,LL.M,
LXXXVIII Addl. City Civil & Sessions Judge
Bengaluru City.
Dated this the 23rd day of November 2021
Com.A.A.No.134/2021
Plaintiff: Automotive Axles Limited.,
A company incorporated under the
Companies Act, having its registered
office at Hootagalli Industrial Area,
Off Hunsur Road, Mysore - 5700 18,
Karnataka, Corporate Identification
Number : L5190981 PLC004198. Now
being represented by its Authorized
Signatory Sri. S. Ranganathan.
(By Sri. SPDK., Advocates)
-vs-
Defendants: 1. Mullur Solar Parks Private Ltd.,
A company incorporated under the
Companies Act, registered office at
Plt No.1202, 1215A, Door No.8-2-2
93/82/A1202, S.L. Jublee Road, No.61,
Jubliee Hills, Hyderabad, Telangana,
having CIN
No.U40106TG2019PTC137922,
being represented by its Director
Sri. Sunil Talla.
2. Ecoren Energy India Pvt. Limited.,
a company incorporated under the
Companies Act, having its office at
Plot No.1202, 1215A, Door No.8-2-
2 Com.A.A.No.134/2021
293/82/A1202, S.L. Jublee Road,
No.61, Jublee Hills, Hyderabad,
Telangana, having CIN: U40108TG
2013PtC087661 being represented
by its Chief Executive Officer,
Sri. Sunil Talla.
3. Altilium Consulting LLP, a Limited
Liability partnership bearing Reg.
No.LLPIN AAN-5990 and having
registered office at 1303, the Sleuths
CGHS Ltd., Plot-6, Sec.19B, Dwaraka
New Delhi - 110 075.
(By Sri. L.K.N., Advocate for R1 & R2)
(R3- Exparte)
ORDER
This is a petition filed by the petitioner under Sec.9 of the Arbitration and Conciliation Act 1996 r/w clause 10(3) of the Commercial Courts Act and sought for interim measures for mandatory injunction directing the respondents to supply uninterrupted power/ electricity of 7,35,000 KW units every month as agreed in the power purchase agreement dated 09.10.2017 and novation agreement dated 25.01.2021 till the commencement and final disposal of the arbitration proceedings.
2. Nutshell of the petition are as under:
The petitioner in its petition has alleged that who is a joint venture of M/s. Kalyani Group and Marytr Infosis USA with manufacturing facilities located at Mysore (Karnataka), 3 Com.A.A.No.134/2021 Jamshedpur, (Jharkhand) and Rudrapur (Uttarkhand), who are leading manufacturers of drive axles, non drive axles, front steer axles specialty and defence axles and drum and disc brakes. They provide these products to the major domestic and global manufacturers of trucks and bushes pertaining to segments such as light, medium and heavy commercial vehicles, military and off heavy vehicles after market and exports. The respondent No.1 and 2 are in the business of owning and maintaining the renewable energy, based power generation within and outside India and their inter alia establishing a solar PV based power plant in the State of Karnataka. The respondent No.3 is in the business of power trading and energy advisory services through conventional/ non conventional energy sources and its group companies/ SPVS/ associates are currently owning and maintaining renewable energy generation based on wind and solar private technologies within state of Karnataka for an operational and upcoming aggregated quantum of up to 250 Mega Watts. The 2nd respondent had entered into a solar power purchase agreement I.e. PPA on 09.10.2017 commencing from its execution till 31st day of March 2028 with a lock in period of 120 months. The 2nd respondent by virtue of the said PPA, agreed to supply electrical power facility to its premises at automotive axles 4 Com.A.A.No.134/2021 limited, Hootagalli Industrial Area of Hunsuru Road, Mysore.
Thereafter the execution of the PPA, the 2nd respondent issued notice of novation dated 07.09.2020 by referring to schedule 17 and 18 of the PPA and propose to transfer the obligation to the 1 st respondent and has agreed for novation, however the 3rd respondent has not annexed the signature to the novation agreement. The novation of PPA, the 1 st respondent referring to the Covid-19 pandemic situation abruptly expressed inability to supply the power and he has suitably replied to the said notice and called upon to cure the default and to supply the power as agreed in PPA.
3. The petitioner in its petition has further alleged that the respondents are obligated to supply power of 7,35,000 KW units every month. The schedule annexed to novation agreement dated 25.01.2021 clearly establishes the duty of the 1 st respondent regarding the quantity of power which they are obligated to supply. The respondents have been found default in supplying power for the month of July and August 2021 as agreed. So, he has requested the respondents to supply the power as agreed and tried to establish contacts with them and again and again to resolve the aforesaid issues, but the same was of no avail and the respondents have failed and neglected to 5 Com.A.A.No.134/2021 contact and supply the power and its requirement of 7,35,000 KW units of power every month and same is agreed in between them as per the schedule of novation agreement due to default of the respondents constrained to obtain a power from other sources and is not getting required power from its other sources, thereby facing severe impediments in arranging the required power and incorrect additional cost/ expenses to procure power/ electricity supply from other sources and the respondents are directly liable for the same. Thus it is needless to say that the respondents are in clear breach of agreement dated 09.10.2017 and 25 th day of 2021. It is the obligation on the part of the respondents in terms of the PPA have to supply the power and ensure no impediments in supply of power to its facility. Due to default in supply of power he has suffered huge loss in the business owning to the default of the respondents and its production line has been disturbed and unable to meet the target thereby losing many clients and the respondents defaulters in supply of power and they are liable to make good of damages caused, despite repeated reminders to cure the defaults and supply the power regularly and also make good of damage and loss caused to it the respondents have failed to adhere to the requests.
6 Com.A.A.No.134/2021
4. The petitioner in its petition has further alleged that in spite of delivery of the notice, the respondents have failed to supply the power as agreed in the power purchase agreement and the respondents have not heeded its repeated legitimate request and demands, thereby has constrained to invoke the arbitration clause at clause 19 of the power purchase agreement dated 09.10.2017 and clause 12 of novation agreement dated 25.01.2021 and called upon to take notice invoking the arbitration dated 23.08.2021. The cause of action for the petition has been arisen on 19.10.2017 the date on which entered the power purchase agreement and again on 07.09.2020 the date on which the respondent No.2 issued the notice of novation and on 25.01.2021 the date on which the agreement was entered by and between them and on 07.07.2021 the date on which the respondent No.1 submitted the notice of termination and on 19.07.2021 the date on which the reply to the termination notice and on 23.08.2021 the date on which dispatched the notice by invoking the arbitration and such other dates well within the jurisdiction of this court and prays for allow the petition.
5. In response to the notice, the respondents No.1 and 2 were appeared through their respective counsel, but the respondent No.3 did not appear nor filed the objection. The 7 Com.A.A.No.134/2021 respondent No.1 and 2 filed the objection in which have alleged the respondent No.1 is a premier developer and owner of renewable projects. The respondent No.1 aims to deliver high performance clean energy projects that can secure the energy needs of utilities and large consumers. The respondent No.1 develops finances, constructs, owns and operates utility scale renewable energy projects with focus on building on shore wind and solar PV facilities to generate clean and reliable energy. The respondent No.1 is thus highly reputed producer and supplier for the renewable energy needs of many large scale utility projects across India. The petitioner and the respondent No.1 entered a PPA dated 09.10.2017. As per the PPA the respondent No.1 was required to supply 8 million units of power for every solar year to the petitioner. The respondent No.2 was hence require to supply approximately 5 lack units to the petitioner company per month. The respondent No.2 began complaining with the requirements under the PPA and supplied the power contracted by it for it over two years. In the year 2019 acknowledging the shortfall of supply for the solar year under the PPA and with the intention to continue the business relationship with each other agreed on a revised schedule for the supply of energy by way of the letter dated 26.09.2019, while the respondent No.1 working towards 8 Com.A.A.No.134/2021 meeting its obligations under the revised schedule but the applicant consistently failed to pay its invoice in time. The delay on the part of the petitioner in making timely payments began taking a toll on the company. Despite reminders to pay the invoices in time, the applicant invariably delayed the payments of invoice which in turn had an effect on the business of the applicant on the whole, subsequently novation agreement was executed between the respondent No.2 with applicant by way of which the respondent No.2 transferred the rights, liabilities and assets as under the PPA in favour of the respondent No.1. By virtue of the novation agreement all actions to be raised by the applicant where to be so instituted against the respondent No.1 and not the respondent No.2.
6. The respondents in their objection were alleged in the month of March 2020 the world saw the unprecedented and uncontrollable effects of the covid 19 epidemic/ pandemic and measures were taken both by the Central and the State Governments to curtail the devastating effects of the epidemic/ pandemic measures included a national lock down, state wise lock down, curfews restrictions on interstate travel of a person, goods and services. The national lock down was implemented in phases from 25.03.2020 to 14.04.2020 as phase III from 9 Com.A.A.No.134/2021 15.04.2020 to 03.05.2020 as phase II and 04.05.2020 to 17.05.2020 as phase III, it was at the point when operational and functional aspects of the plant began being effected by the pandemic. The respondent No.1 in a diligent and responsible manner issued a letter dated 23.03.2020 intimating the petitioner that they were taking all measures to ensure a compliance of the PPA however on account of the force majeure event that the world was grappling with including respondent No.1 it was impossible to fully comply with the terms of the PPA, resultantly the respondent No.1 faced various difficulties and challenges in the smooth functioning of the plant.
7. The respondents in their objection they further alleged that the respondent No.1 also faced a fire hazard at the plant in the month of February 2020, March 2020 and found it virtually impossible to engage OEM personnel to conduct a site assessment of the plant to rectify and to fix the damage caused by the fire accident. Despite these challenges the respondent No.1 continued to put in all its efforts to comply with the terms of the PPA and addendum. The respondent No.1 also faced the challenges of operating the plant as many of its employees and operators were infected with covid 19 and needed extensive medical support and care. It was impossible to continue supply of 10 Com.A.A.No.134/2021 power to the applicant to the full capacity of the demanded quantum of power and the same was exempted at the force majeure class, during the time the plant was also affected by severe curtailments of power from the electricity supply companies and further suffered extensively due to grid failures which continued till date. These events were more frequent during the peak epidemic/ pandemic period and it also continues till date. The respondent No.2 is also facing challenges in production and supply of the high consumption of the power by the applicant due to the reasons and was constrained to terminate the PPA on account of the force majeure event that the respondent No.2 was struggling with that owning its obligation under the PPA. The respondent No.2 was often constrain to issue C forms to the state load dispatch centre for the whole of the demanded quantum of power and was unable to generate the same and constrained to pay SLDC at the rate INR 7.20 for the 1 st lack per unit and INR 7.45 for the balance units while invoicing the applicant only INR 4.78 as per the PPA. It has led to gross imbalance in the ability of the respondent No.1 to sustain its business operation and the respondent No.1 has no choice but to terminate the PPA with the petitioner. By virtue of the exparte interim order obtained by the petitioner by misleading the court. 11 Com.A.A.No.134/2021 The respondent No.1 has greatly and gravely prejudiced because of the exparte order which obtained. The respondent No.1 is responsible for over 25 number of employees and cannot be forced by law to continue servicing an agreement that effects its financial integrity and capabilities. Subsequently due to the onset of the 2nd wave of covid-19 the activities of the power plant were severely effected and in consonance with the force majeure clause under the PPA, respondent No.1 issued a termination notice dated 07.07.2021 to the petitioner and the petitioner responded to the termination notice vide letter dated 19.07.2021 and demanded the respondent No.1 to continue supply of power. The respondent No.1 reiterated to the petitioner about the difficulties faced in operating the plant during the unprecedented time of crisis and the petitioner insisted the respondent No.1 to continue supply of power to them in complete retrograde to the ongoing discussions with the petitioner, the petitioner filed the present application along with I.A. seeking for untenable reliefs.
8. The respondents No.1 and 2 in their objection statement they further alleged that the interim relief would amount to abuse of process of law and caused grave prejudice to them as the applicants sought for injunction to operate from the commencement until the final disposal of the arbitration 12 Com.A.A.No.134/2021 proceedings. However such a question determining whether supply can be granted/ mandated under the contract that has been terminated by one of the parties to the agreement requires adjudication through a complete trial wherein may arrive at a decision after appreciating the evidence i.e. produced by both the parties. The application which filed is not maintainable in law or on facts. The applicant has initiated the proceedings under Sec.9 of the Arbitration and Conciliation Act for seeking mandatory injunction against them to supply power to the applicant as per PPA as well as the novation agreement, such a relief as claimed in the application is not maintainable in the eye of law it is wholly contrary to the terms of the PPA. The granting of the relief as claimed by the applicant in the I.A. would amount to performance of validity terminated contract. By grant of an exparte order and the prayer sought for before this court, the appellant has essentially sought to reinforce the PPA that was legally terminated by the respondent No.1. The scope of Sec.9 of the Arbitration and Conciliation Act is very limited and cannot be filed for the asking a party seeks of relief under Sec.9 of the Arbitration and Conciliation Act is required to make out a cogent and tenable case both in law and the facts. The applicant has failed to produce any relevant documents in support of its 13 Com.A.A.No.134/2021 contention made in the application, a bare perusal of the application would show that the applicant has miserably failed to discharge its heavy burden of proving that it is entitled to any of the reliefs as claimed in the application. Therefore, the application which is deserved for dismissal. The applicant in the reply to the termination notice dated 19.07.2021 in a complete valet face has stated that due to the alleged defaults in supply of power on the part of the respondents. The reply to termination letter is also be treated as an event default notice as provided under clause 10 to one of the PPA. The applicant could claim compensation under the PPA and is clearly an after thought. The applicant has delayed making the payments to them, clause 9.2 of the PPA provides that payment on the invoice raised by them to be cleared within 15 days of seller raising such invoice. The clause 9.4 provides that the buyer fails to make payment on invoices by the due date the seller is entitled to charge 12% simple interest or in the alternative discontinue wheeling power to the buyer. The account statement of the respondent No.2 produced by the applicant as document No.9 to the application under column No.11 provides for the clearing date and column No.12 provides for the payment due to date which clearly indicates that the applicant has delayed making payments by 14 Com.A.A.No.134/2021 over a month to them and they are entitled to claim interest from the applicant for the same and reserved their right to claim against the applicant.
9. The respondents in their objection statement have further stated the applicant has hopelessly failed to establish a prima facie case in law and facts. A bare perusal of the PPA and novation agreement clearly shows they have in contractual right to termination of contract on force majeure. They have legally exercised the contractual right and cannot be determinable for the same. The applicant has not even establish prima facie case to grant the relief and applicant has failed to establish that the termination was illegal and failed to establish prima facie case as well as balance of convenience in its favour to grant the relief under Sec.9 of the Arbitration and Conciliation Act and failed to establish that the balance of convenience lies in its favour. The PPA contains termination clause on account of force majeure and they have invoked the same in accordance with the terms of the PPA. The applicant does not have any right to exempted from termination. The applicant itself submits that it is connected to the state transmission grid, in the event they failed to supply power to the applicant the applicant is not in a situation where they have no access to power at all. The applicant can still avail 15 Com.A.A.No.134/2021 power from BESCOM. The applicant never be in a position where they are completely cut off from power supply, question of balance of convenience lying in favour of the applicant does not arise. The applicant would be entitled to claim compensation in the case of breach of the PPA, the same is also provided under the PPA though it would be subject to strict proof and evidence through trial. In fact the balance of convenience lies in favour of the respondent No.2. The respondent No.1 is unable and impossible to increase the generation of renewable power at its power plant. The respondent No.2 is thus put to great prejudice by the exparte interim order. The respondent No.1 is left with little choice, but to relocate power from other customers to the applicant in due difference and compliance of the orders of the court and is being greatly prejudiced by the same. The respondent No.1 reserved its rights to claim compensation for the financial losses, anticipates and is forced to endure extensive financial burden on account of exparte order which granted by this court in favour of the applicant. The applicant has failed to establish any irreparable injury that it may be faced with and attempted to mislead this court stating that the applicant is unable to procure energy/ power from any other source. It is not the case of the applicants that the respondent No.1 is its sole 16 Com.A.A.No.134/2021 source of renewable power. Therefore, the applicant may well be connected to other open access generators for renewable power. Thus directing them to supply power as sought does not arise. The termination of the PPA and novation agreement is legal and valid and no irreparable loss or prejudice which caused to the petitioner, if application is rejected. If the exparte interim order or any interim order has been continued they will be put to irreparable loss and injustice, since they have entered into number of 3rd party contracts to supply power to other customers. The power plant has been severely effected due to various break downs in equipment and they neither in a position to repair the same as there is no technical personnel available during this time. The respondent No.1 establishes solar PV plant and due to unpredictable rainfall in the region from July 2020 hampered the functioning of the power plant forcing them to withhold the supply to the customers and to direct to supply solely to the applicant it would cause tremendous loss to them. They currently neither has the capability to supply the demanded power to the applicant and to direct them to supply power as per the terms of the PPA would requires them the burden additional costs over and above the losses. It is already undergoing, the applicant is connected to the state grid and can avail power from the state 17 Com.A.A.No.134/2021 corporation and or any other supplier by using the open access facilities. Therefore, it is just and necessary to reject the application and because of force majeure they could not supply the power as sought for and the prayer which sought by the applicant is highly untenable, non maintainable and which is amount to abuse of process of law, as the applicant is seeking enforceable agreement, which is rightfully and legally terminated. Once the PPA has been terminated, the question of supply of the power as sought for does not arise and the force majeure notice dated 23.03.2020 informed to the applicant they were unable to supply the power as sought for and they were also alleged the other facts which are alleged in their objection statement and prays for reject the application.
10. Heard the arguments on both sides.
11. The points that arise for consideration of this court are as under:
1) Whether the petitioner has made out the prima facie case is lies in its favour?
2) Whether the petitioner proves that the balance of convenience lies in its favour?
3) Who will be put to irreparable loss and injustice, if petition is dismissed?
4) What order?18 Com.A.A.No.134/2021
12. My answer to the above points are as under:
Point No.1: In the Affirmative;
Point No.2: In the Affirmative;
Point No.3: Petitioner Point No.4: As per final order, on the following;
REASONS
13. POINT NO.1 to 3: These points are interrelated to each other, in order to avoid repetition of facts and materials, these points are discussed together, as the petitioner has approached the court on the ground that who is a joint venture of M/s.Kalyani group and Maritor Inc.. USA with manufacturing facilities located at Mysore(Karnataka) Jamshedpur (Jharkand) and Rudrapur (Uttarkhand) and leading manufacturers of Drive Axles, Non Drive Axles, Front Steel Axles, Specialty and defense Axles and drunk as well as disk breaks and provide the products to the major domestic and global manufacturers of trucks and bushes pertaining to segments such as light, medium and heavy commercial vehicles, military and off highway vehicles after market and exports. The respondent No.1 and 2 who are in the business of owning and maintaining the renewable energy based over generation within and outside India and they are interalia establishing a solar PV based power plant in the state of 19 Com.A.A.No.134/2021 Karnataka. The respond No.3 is in the business of power trading and energy advisory services through conventional/non conventional energy sources and it's group companies/SPV'S Associates or currently owning and maintaining renewable energy generation based on wind and solar PV technologies within the state of Karnataka for an operational and up coming aggregated quantum of up to 250 Mws. A solar power purchase agreement was taken place on 09.10.2017, commencing from the date of its execution till 31.03.2028 with a lock in period of 120 months. The second respondent by virtue of the said PPA agreed to supply electrical power facility having AVT metering set up with RR No.HT83. The respondent No.2 has issued a notice of novation and transfer the obligation to the first respondent for which agreed the same and the respondents are obligated to supply power of 7,35,000/- KWh units every month but the respondents issued notice of termination for which got replied to the said termination notice and when the respondents did not comply it's request in supply of power, thereby, the petitioner has filed the instant petition against the respondents.
14. The learned counsel for the petitioner in his arguments has submitted that the solar power purchase agreement was taken place in between the petitioner and the 20 Com.A.A.No.134/2021 respondents and by virtue of the solar power purchase agreement, the respondents have to supply power of 7,35,000/- KWh units every month and novation agreement was also taken place in between them and it is the duty of first respondent to supply quantity of power but the respondents in stead of supply quantity of power but they were default in supply of power for the month of July and August 2021 as agreed. The petitioner requested the respondents to supply of the power as agreed but the respondents were failed and neglected to supply the power as agreed. The respondents have issued a notice of termination for which the petitioner as properly replied to the termination notice and the petitioner has issued a notice for invoking the arbitration. If the respondents were not complied the agreement which taken place in between the petitioner and the respondents, the petitioner will be put to irreparable and injustice and no injustice would be caused to the other side if this court directed to supply the power by granting mandatory injunction, other wise, the petitioner will be put to irreparable loss and injustice and prays for allow the petition.
15. Per contra, the learned counsel for the respondents while canvasing his arguments has submitted the petition which filed by the petitioner is not maintainable in law or on facts and 21 Com.A.A.No.134/2021 admitted about the agreement which taken place in between the petitioner and the respondents as the petitioner and the respondent No.1 were entered power purchase agreement on 09.10.2017 and the respondent No.1 was required to supply 8 Million Units of power to the petitioner and the respondent No.2 require to supply approximately 5,00,000/- Units to the petitioner company per month. In the year 2019 acknowledging the short fall supply for the solar here under the PPA and with the intention to continue the business relationship with each other the petitioner and the respondent No.1 were agreed on revised schedule for the supply of energy by way letter dated 26.09.2019. In the month of March 2020, due to the Covid Pandamic and the lock down through out the nation the respondent No.1 has issued a letter dated 23.03.2020 intimating the petitioner about their force majeure event that the world was grappling with including the respondent No.1 it was impossible to fully comply with the terms of the power purchase agreement and the respondent No.1 faced various difficulties and challenges in the smooth functioning of the plant. The respondent No.1 faced a fire hazard in the plants in the month of February 2020-March 2020.The respondent No.1 despite of challenges has complied with the terms of the power purchase agreement and addendum. 22 Com.A.A.No.134/2021 The respondents due to Covid Impacts and other problems could not continue to supply of power to the petitioner. The respondent No.2 is also facing challenges in production and supply of high conjunction power to the petitioner. Therefore, the respondent No.1 has no choice but to terminate the PPA with the petitioner and in consequence of Covid-19, and other problems, the respondent No.1 has issued a termination notice on 07.07.2021 to the petitioner for which the petitioner has issued a reply and demanded to continue a power supply when the respondents were facing the difficulties question of supply of power to the petitioner does not arise and sought for dismissal of the petition.
16. It is an admitted facts the petitioner has filed the instant petition U/s 9 of the Arbitration and Conciliation Act, and sought for interim measure for mandatory injunction directing the respondents to supply uninterrupted power/electricity of 7,35,000 Kwh units every month as agreed in the power purchase agreement dated 09.10.2017 and in novation agreement dated 25.01.2021 till the commencement and final disposal of the arbitration proceedings. The learned counsel for the respondents while canvasing his arguments has submitted that this court has no jurisdiction to adjudicate the matter which is in dispute and 23 Com.A.A.No.134/2021 the respondents have already terminated the power purchase agreement and novation agreement question of supply of the power to the petitioner does not arise but on the other hand, the learned counsel for the petitioner while canvasing his arguments has submitted that the petition which filed is maintainable in law or on facts before this court and this court having the jurisdiction to adjudicate the matter which is in dispute in view of the arbitration clause as mentioned in the power purchase agreement which taken place in between the petitioner and the respondents. Thus before considering materials which are on record and the arguments which advanced by both counsels it is just and necessary to know the legal aspects which are involved for the proper adjudication of the issue which involved in the case and for proper appreciation of the objection which raised by the respondents. It is an admitted fact the petitioner has filed the instant petition for interim measures till institution of arbitration proceedings. Now let me know the definition of Arbitration and Arbitration agreement, thus this court drawn its attention on Section 2(a) and (b) of the arbitration and conciliation act which reads like thus:
24 Com.A.A.No.134/2021
a. "Arbitration" means any Arbitration whether or not administered by permanent Arbitral institution.
b. "Arbitration Agreement" means an agreement referred to in Section 7, Thus this court drown its attention on Section 7 of the Arbitration and Conciliation Act, which reads like this:
7 Arbitration agreement. --
(1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in--
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or
(c) an exchange of statements of claim and defense in which the existence of the agreement is alleged by one party and not denied by the other.
(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.
The above provisions are very much clear that the Arbitration means any Arbitration whether or not administered by the permanent Arbitral institution and in order to constitute a Arbitration Agreement satisfied the following: 25 Com.A.A.No.134/2021
CONDITIONS
1. There has to be an agreement.
2. It has to be in writing.
3. The agreement must bear the signatures of the parties concerned.
4.Such agreement must contain an Arbitration Clause.
So, in failure of any of the conditions which referred above the Arbitration Agreement itself is invalid and unenforceable under law. Thus in order to constitute an Arbitration Agreement the court has to consider whether the Arbitration Agreement satisfied the conditions which referred above or not to consider the Arbitration Agreement which alleged to have been taken place in between the parties.
17. The learned counsel for the respondents while canvasing his arguments has submitted that there is a force majeure in view of Covid-19 Pandemic and the difficulties of the respondents which mentioned in the objection statement, it is not possible to supply the power to the petitioner. Therefore, the petitioner is not entitled the relief of mandatory injunction as sought for, thus this court drawn its attention on Section 39 of Specific Relief Act, which reads like thus:
26 Com.A.A.No.134/2021
39. Mandatory injunctions.--When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts which the court is capable of enforcing, the court may in its discretion grant an injunction to prevent the breach complained of, and also to compel performance of the requisite acts.
The above provision which referred above is reflects that it is an a compulsion to the other party to do certain Act. In the instant case the petitioner sought for mandatory injunction for supply of power in terms of power purchase agreement.
18. The learned counsel for the respondents while canvasing his arguments has much argued that the petition which filed is not maintainable in view of Section 41 of Specific Relief Act, as the respondents have terminated the power purchase agreement and the petitioner itself admitted about the breach of the agreement and for damages. Thus this court drawn its attention on Section 41 of The Specific Relief Act, which reads like thus:
41. Injunction when refused.--An injunction cannot be granted
--(a) to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;(b) to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;(c) to restrain any person from applying to any legislative body;
(d) to restrain any person from instituting or prosecuting any proceeding in a criminal matter;
(e) to prevent the breach of a contract the performance of which would not be specifically enforced;
(f) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;
27 Com.A.A.No.134/2021
(g) to prevent a continuing breach in which the plaintiff has acquiesced;
(h) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;
(i) when the conduct of the plaintiff or his agents has been such as to dis entitle him to the assistance of the court;
(j) when the plaintiff has no personal interest in the matter. The above provision is very much clear about non granting of injunction in the circumstances which referred above.
19. The learned counsel for the respondents while canvassing his arguments has much argued that the relief which sought is in respect of infrastructure project by virtue of Section 20A of The Specific Relief Act, therefore, no injunction shall be granted by the court in a suit involving a contract relating to an infrastructure project. Thus this court drawn its attention on Section 20A of The Specific Relief Act, which reads like thus:
(1) No injunction shall be granted by a court in a suit under this Act involving a contract relating to an infrastructure project specified in the Schedule, where granting injunction would cause impediment or delay in the progress or completion of such infrastructure project.
Explanation.-For the purposes of this section, section 20B and clause (ha) of section 41, the expression "infrastructure project" means the category of projects and infrastructure Sub-Sectors specified in the Schedule.
28 Com.A.A.No.134/2021(2) The Central Government may, depending upon the requirement for development of infrastructure projects, and if it considers necessary or expedient to do so, by notification in the Official Gazette, amend the Schedule relating to any Category of projects or Infrastructure Sub-Sectors. (3) Every notification issued under this Act by the Central Government shall be laid, as soon as may be after it is issued, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the notification or both Houses agree that the notification should not be made, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification.
The above provision is very much clear no injunction shall be granted by the court in respect of the issue involved relating to an infrastructure project.
20. The learned counsel for the respondents while canvasing his arguments has submitted that the alleged contract which comes U/s 14 of Specific Relief Act, and said contract cannot be enforceable. Thus this court drawn its attention on Section 14 of Specific Relief Act which reads like thus:
14. Contracts not specifically enforceable.--29 Com.A.A.No.134/2021
(1) The following contracts cannot be specifically enforced, namely:
(a) a contract for the non-performance of which compensation in money is an adequate relief;
(b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms;
(c) a contract which is in its nature determinable;
(d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise.
The above provision is very much clear if the contract comes with in the purview of provision which referred above contract not specifically enforceable.
21. Now, let me know the materials which on record as the petitioner and the respondents were not disputed about the power purchase agreement which taken place on 09.10.2017. So for the proper appreciation of the recitals which appeared in the said agreement is necessary for reproduction to know who is the buyer and who is the seller of the power which reads like thus:
This Solar Power Purchase Agreement ("Agreement") dated this, the 9th day of October, Two Thousand and Seventeen, is executed at Mysuru, Karnataka by and between:
Ecoren Energy India Private Limited, CIN: U40108TG2013PTC087661 a company incorporated under the Companies Act 1956, and having its registered office 30 Com.A.A.No.134/2021 at Plot No.1202, 1215A Door No.8-2-293/82/A/1202, S.L.Jubilee, Road No.61, Jubilee Hills, Hyderabad, 500033 Telangana, India (hereinafter referred to as seller, which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the Second Part.
AND
Automotive Axels Limited, CIN:
L51909KA1981PLC004198 a company incorporated under the Companies Act 1956, and having its registered office at Hootagalli Industrial Area, Off Hunsur Road, Mysuru- 570018, Karnataka-India (hereinafter referred to as Buyer, which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include its successors and assigns) of the Second Part.
The above recitals which appeared in the Power Purchase Agreement, the petitioner is the buyer and the parties were agreed to supply of the power till 31.03.2028 as per clause 2.1 of PPA.
22. The learned counsel for the respondents while canvassing his arguments has much argued regarding clause 14 of The Force Majeure. So for the proper appreciation of the recitals which appeared in the PPA is necessary for reproduction which reads like thus:
31 Com.A.A.No.134/2021
The following events shall constitute Force Majeure events provided they satisfy all of the requirements set out in Clause 14.1:
14.2.1 Acts of war, invasion, armed conflict, blockade, revolution, riot, insurrection or civil commotion, terorism, sabotage, fire, explosion or criminal damage;
14.2.2 Acts of God, including fire, lightning, cyclone, typhoon, flood, tidal wave, earthquake, landslide, epidemic or similar cataclysmic event;
14.2.3 Events of strikes, lock-outs, work to rule actions or go slows excluding those which are site specific and attributable to the any act or omission of the affected party;
14.2.4 Any Changes in Law adversely affecting the performance of the parties of their respective obligations under the Agreement.
14.3 The Affected Party shall give a written notice to the other Party informing the occurrence of a Force Majeure event, within seven days of its knowledge of commencement of such event.
14.4 Each Party suffering a Force Majeure event shall take, or cause to be taken, such action as may be 32 Com.A.A.No.134/2021 necessary to void, nullify, overcome or otherwise to mitigate in all material respects the effects of any Force Majeure event suffered by either of them and the Parties agree to meet to seek and coordinate appropriate mitigation measures.
14.5 The Affected Party shall resume the performance of its obligations under this Agreement as soon as practicably possible from the date of cessation of the Force Majeure event or its consequences.
14.6 The occurrence of a Force Majeure event shall not excuse any Party from its obligation to pay any amount, which is due and payable under this Agreement as of the date of notification of Force Majeure by the Affected Party, or which continues to accrue and become payable during the subsistence of a Force Majeure event.
It is however, that the Parties shall not be in breach of their obligations under this Agreement, if the actual payment is delayed due to a Force Majeure event.
14.7 If a Force Majeure event continues for a period exceeding 60(sixty) days, the Parties shall have the option to terminate this Agreement. Upon such termination, the Buyer shall pay to the Seller all amounts due but not paid by the Buyer prior to such termination.
The above recitals which appeared in the PPA is very much clear that which are the events are comes under the force mejeure in 33 Com.A.A.No.134/2021 terms of the agreement which taken place in between them and to decide whether the Covid-19 Pandemic and other difficulties which stated in the objection comes under the events which referred above.
23. The learned counsel for the respondents while canvassing his arguments has submitted as per the PPA the petitioner has not paid the amount well within time and there is a delay of payment is on the part of the petitioner. Thereby, the PPA has been terminated. But whereas the learned counsel for the petitioner while canvasing his arguments has submitted that the PPA has been taken place in between them which effects from the date of agreement till March 2028 and the objection which raised do not comes within the purview of force majeure.
24. Now let me know the arguments which advanced by the both counsels. It is an admitted fact both counsels have not disputed the Power Purchase Agreement which taken place on 09.10.2017, even the parties were not disputed about the recitals which appeared in the Power Purchase Agreement, the learned counsel for the respondents has much argued that this court has no jurisdiction to adjudicate the matter which is in dispute as the Solar Power Plant is run and operated by the respondent No.1 is 34 Com.A.A.No.134/2021 situated at Mallur in Raichur District and the applicant as per the cause title based out of Mysore, Karnataka state and the respondent No.1 and 2 are based out of Hyderabad and respondent No.3 is based in New Delhi are not within the jurisdiction of this court even their office is not situated within the jurisdiction of this court and no part of the cause of action was accrued in terms of the agreement within the jurisdiction of this court and this court jurisdiction is ousted as per the admitted facts which stated above. Now the question arises whether this court having the jurisdiction to adjudicate the matter which is in dispute. Thus this court drawn its attention on clause 19 of Solar Power Purchase Agreement which reads like thus:
Dispute resolution:- Any dispute or claim arising out of or in connection with or relating to this agreement including, but not limited to, any dispute regarding its existence, validity, construction, interpretation, breach, termination or enforceability (dispute) shall be addressed by the parties and resolved pursuant to Article 20.
Amicable settlement:- Any and or disputes
between the parties arising out of or in
connection with this agreement or its
performance (including the validity of this
35 Com.A.A.No.134/2021
agreement) shall, so far as is possible, be
settled amicably between the parties.
Referral to Arbitration:- If after a period of 60 business days from such disputes the parties have failed to reach an amicable settlement such dispute shall at the request in writing of any party to such dispute or claim (dispute notice) be settled by biding Arbitration by a mutually agreed Sole Arbitrator (Arbitrator) appointed in accordance with the Arbitration and Conciliation Act, 1996 as amended from time to time.
Conduct of Arbitration:- All Arbitration Proceedings shall be conducted in the English language and the venue of Arbitration shall be Bangalore. The Arbitrator shall decide any such dispute or claim strictly in accordance with the governing law specified in Article 33. The parties agreed that the competant court in Bangalore shall have the jurisdiction to entertain any proceedings in relation to the Arbitration including but not limited to proceedings for interim relief before, pending or post the Arbitration and enforcement of the Arbitral award.
The above recitals which appeared reflects this court having the jurisdiction to adjudicate the matter which is in dispute as the 36 Com.A.A.No.134/2021 petitioner in the petition itself has stated the respondents were breached the Power Purchase Agreement in spite of repeated request and demand to supply the power properly.37 Com.A.A.No.134/2021
25. The learned counsel for the petitioner on this aspect has drawn the court attention on the judgment of Hon'ble Supreme Court which reported in 2017 (7) SCC 678 in between Indus Mobile Distribution Pvt. Ltd. Vs. Datawind Innovations Pvt. Ltd. And others, on careful perusal of the said judgment, in the said judgment, as per the Arbitration Agreement between the parties the seat of the Arbitration was at Mumbai and the jurisdiction was to exclusively vest in the Mumbai courts.
Rejecting the contention of the respondent that the jurisdiction could not vest in courts of Mumbai as no cause of action arose. Thus their lord ship held that under the law of Arbitration unlike the code of civil procedure a reference to seat is a concept by which a neutral venue can be chosen by the parties to an Arbitration clause. The movement seat was determined at Mumbai it vested the Mumbai courts with exclusive jurisdiction for purposes of regulating Arbitral Proceedings arising out of the agreement between the parties. In the instant case also as per the recitals of Arbitration Clause which referred above the Power Purchase Agreement was taken place in between the petitioner and the respondents and they were agreed the exclusive jurisdiction of the court to adjudicate their dispute arising in between them. Therefore, this court having the jurisdiction to 38 Com.A.A.No.134/2021 adjudicate the matter which is in dispute. Hence, the arguments which advanced by the learned counsel for the respondents holds no water and the judgment which relied is applicable to the case on hand.
26. The learned counsel for the petitioner has drawn the court attention on the judgment of Hon'ble Supreme Court which reported in 2020(4) SCC 234 in between BGS SGS SOMA JB Vs. NHPC Ltd. On careful perusal of the said judgment in the said judgment their lordship held that the agreement between the parties provided that in case of a dispute within India contractor the Arbitration Proceedings shall be held at New Delhi or Faridabad and there being no other contra indication either New Delhi or Faridabad and the proceedings were finally held at New Delhi and both parties were chosen that the courts at New Delhi alone would have exclusive jurisdiction. In the instant case also the parties were agreed in case of any dispute out of Power Purchase Agreement and Addendum the Bangalore court having the jurisdiction to adjudicate the matter which is in dispute. Therefore, the judgment which relied by the learned counsel for the petitioner is applicable to the case on hand. 39 Com.A.A.No.134/2021
27. The learned counsel for the petitioner has drawn the court attention on the judgment of the Hon'ble Supreme Court which reported in 1993(3) SCC 161 in between Shivkumar Chadha Vs. Muncipal Corporation of Delhi and Ors. And another judgment of Hon'ble Supreme Court reported in 2020(5) SCC 462 in between Brahmani River Pellets Ltd. Vs. Kamachi Industries Ltd. On careful perusal of the said judgment their lordship held that as per clause 18 of the agreement which taken place between the parties containing the Arbitration Clause that the Arbitration shall be under Indian Arbitration and Conciliation law and the venue of Arbitration shall be Bhubaneswar. The respondent invoked Arbitration Clause and the appellant did not agreed for appointment of Arbitration and when the parties have agreed for place for Arbitration it gets the status of seat which is the jurisdiction seat. In the instant case also the parties have agreed for place for Arbitration and put their signatures in the Power Purchase Agreement which is binding on them. Therefore, the judgments which stated supra are applicable to the case on hand. Therefore, the arguments which advanced by the learned counsel for the respondents on this aspect holds no water.
40 Com.A.A.No.134/2021
28. The learned counsel for the respondents while canvasing his arguments has much argued that the petitioner is not entitled the relief in view of Section 20A of Specific Relief Act. It is an admitted fact the petitioner and the respondents were not disputed about the Power Purchase Agreement and the novation agreement which taken place in between them. Now the question is whether the petitioner is not entitled the relief in view of Section 20A of the Specific Relief Act which referred above. Admittedly, the Power Purchase Agreement was taken place on 09.10.2017 and Novation Agreement was taken place on 25.01.2021. So, one thing is cleared the Power Purchase Agreement was taken place on 09.10.2017 and Section 20A of Specific Relief Act was came to be substituted in the place of Section 20 of Specific Relief Act by Act No.18 of 2018 dated 01.10.2018. Now, the question arises whether the Section which referred above is effects the right of the petitioner which already accrued as per Power Purchase Agreement dated 09.10.2017. Thus this court drawn its attention on Section 6 of General Clauses which reads like thus:
(a) revive anything not in force or existing at the time at which the repeal takes effect; or
(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or
(c) affect any right, privilege, obligation or liability acquired, 41 Com.A.A.No.134/2021 accrued or incurred under any enactment so repealed; or
(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or
(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.
6 Effect of repeal. Where this Act, or any 1 [Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not The above provision is very much clear if any act is repealed and provisions have been substituted unless a different intention appears, the repeal and substitution shall not be effected. So, the arguments which advanced by the learned counsel for the respondents on this aspect holds no water.
29. The learned counsel for the respondents has much argued that the petitioner in the petition itself as clearly stated that the respondents have breached the agreement and intending to claim damages and obtaining power from other sources thereby question of granting mandatory injunction does not arise. It is an admitted fact Section 39 of the Specific Releif Act deals with mandatory injunction to compelling to the other party to do 42 Com.A.A.No.134/2021 certain act, which referred above, according to the petitioner, though he has requested the respondents to supply the power as agreed. But the respondents are in breach of agreements dated 09.10.2017 and 25.01.2021 though he has paid entire invoices and bills amount pertaining to the power supply and no impediment on the part of the respondents to supply power. It is an admitted fact Section 39 of The Specific Relief Act empowers the court to prevent the breach of an obligation and it is necessary to compel the performance of certain acts which the court is capable of enforcing. But whereas the respondents were come up with their objection statement stating that because of force majeure they could not supply the power. Accordingly, they have issued a notice dated 23.03.2020. So, by virtue of the said letter the respondents have stated that the prevailing Covid-19 epidemic is expected to adversely impact the power generating ability to Mallur Plant in several ways and both parties were agreed in the event of force majeure terminate the agreement by informing the occurrence of force majeure event for which the petitioner has issued a reply dated on 19th July 2021 and requesting the respondents to supply of power as agreed in PPA as well as letter dated 26.09.2019. In the letter which written by the respondents dated 26.09.2019, is very much clear regarding 43 Com.A.A.No.134/2021 the supply of power as stated in the said letter which belongs to the respondents for which also the petitioner has been agreed in the reply letter dated 19th July 2021.
44 Com.A.A.No.134/2021
30. The learned counsel for the respondents while canvasing his argument has submitted that the petitioner in the reply letter has admitted that he has intending to terminate the agreement and sought for damages in respect of alleged breach of agreement. Therefore, no injustice would be caused to the petitioner in case of rejection of the instant petition. It is an admitted fact the petitioner has issued a reply notice in respect of the notice dated 23.03.2020 which issued by the respondents. Now the question is whether the Covid-19 and other difficulties which are mentioned in the objection statement comes under force majeure, admittedly, the petitioner has filed the instant petition on the ground that the respondents were breached the contract which taken place in between them and the obligation is on the respondents to supply the power in terms of Power Purchase Agreement. As per the notice dated 07.07.2021, Covid- 19 Pandemic and resulting force majeure. Therefore, the burden is on the respondents to place the materials to show Covid-19 Pandemic is also comes within the events of force majeure as per clause 14.2 of the Power Purchase Agreement. It is an admitted fact the respondents have not stated Covid-19 Pandemic is also comes under the force majeure as per clause 14.2 of the PPA. But the events which mentioned therein no where mentioned Covid- 45 Com.A.A.No.134/2021 19 is also comes under force majeure. If that is so the matter would have different. Even the respondents have not placed any materials nor declaration which made by the central government to show Covid-19 Pandemic situation comes under force mejeure in respect of enforcement of contract nor for termination. On this aspect the learned counsel for the petitioner has drawn the court attention on the judgment of Delhi High Court passed in OMP (Commercial) 312/2020 in between M/s. MEP SADJOSE TALAJA MAHUVA Road Pvt. Ltd. Vs. M/s. National Highway Authority of India on careful perusal of the said judgment, the dispute has been arising in relation to the agreements dated 08.07.2016 and 09.08.2016 taken place in between MEP, The Concessionaire and The National Highway Authorities of India. In which their lordship relied on the judgment of Hon'ble Supreme Court which reported in 2020 SCC Online Madras 61 in between Jumbo World Holdings Ltd & Ors. Vs Embassy Property Developments Pvt Ltd and others, held under Sec.20A of the Specific Relief Act has to be considered in the light of two grounds i.e. the provision explicitly refers to the terms suits to indicate that these exclusionary and only applies to civil suits and not petitions of the nature under Sec.9 of the Arbitration and Conciliation Act considering the principles that exclusionary clauses ought to be 46 Com.A.A.No.134/2021 construed strictly, any application thereof to non suit proceedings would be a grave error in law and since the provision has been drafted with an intend to avoid any further delays or impediments in executing the project. In the instant case also, the learned counsel for the respondents has much argued not only on Sec.41, but also on Sec.20A and 20B of Specific Relief Act, but the principles which laid down in the decision which relied directly applicable to the case on hand. Therefore, the arguments which advanced by the learned counsel for the respondents on this aspect holds no water.
47 Com.A.A.No.134/2021
31. The learned counsel for the respondents while canvassing his arguments has much argued that the petitioner itself in the petition has stated about the damages and taking of the powers from others. Therefore, if the petition which filed is rejected, no injustice would be caused to the other side. If the mandatory injunction is granted as prayed by the petitioner, the respondents will be put to irreparable loss and injustice and the said counsel has drawn the court attention on the judgment of Hon'ble Supreme Court passed in C.A.No.5701/1985 in between Indian Oil Corporation Ltd., Vs Amritsar Gas Service and others. On careful perusal of the said judgment, I do respect to the judgment which relied but the facts and circumstances of the present case and the decision which relied are different.
32. The learned counsel for the respondent has submitted that the respondents were already terminated the contract of the petitioner for non payment of the bill and due to Covid 19 and for non-functioning of power plant properly for non availability of employees and the said counsel has drawn the court attention on the following judgments:
1. FA0 (OS No.93/99) of Hon'ble Supreme Court of Delhi in between Rajastan Breweries Ltd Vs The Strow Brewery Company.
2. Appeal (Civil No.3530/1998) in between Her Highness 48 Com.A.A.No.134/2021 Maharani Shantidevi P. Gaikwad Vs Shivajibai Haribai Patil and others.
3. 2007(6) SCC 798 in between Arvind Constructions Company Pvt Ltd. Vs Kalinga Mining Corporation and Ors.
4. Arbitration Petition (Lno.1164/2012) of Hon'ble High Court of Bombay in between Spice Digital Ltd., Vs Vistas Digital Media Pvt. Ltd.,
5. MFA No.8387 and 8388 of 2017 of Hon'ble High Court of Karnataka in between Vistas Wind Technology India Pvt. Ltd., Vs Ramgad Minerals and Mining Pvt Ltd. & Ors.
6. C.S. (Comm) 122/2020 of Hon'ble High Court of Delhi in between Bio World Pvt Ltd Vs Bank Olufsen Expansion,
7. OMP (1)(Comm No.254/2019) of Hon'ble High Court of Delhi in between Overnight Express Ltd Vs Delhi Metro Rail Corporation.
8. 2019 SCC Online Delhi 9747 of Hon'ble High Court of Delhi in between Hariram Nagar and Ors. Vs Delhi Development Authority and Ors.
On careful perusal of the said judgments, in the said judgments, their lordship held that the contract which referred under Sec.14(1)(c) of the Specific Relief Act, contract could be terminated by any party without assigning any reasons, while granting of interim orders court has to exercise principles which applicable and the finding which given by the trial court which is 49 Com.A.A.No.134/2021 erroneous though plaintiff has not made out prima facie case failed to establish the balance of convenience in their favour and the laws and reasons which assigned is perverse and arbitrary. So, in order to grant the interim relief, court has to consider principles laid down in the provisions which applicable. So, I do respect to the decisions which relied, but the facts and circumstances of the present case and the judgments which relied are different.
33. The learned counsel for the respondents while canvassing his arguments has submitted the petitioner is not entitled the relief as prayed for as per the objection which raised in the statement of objection and drawn the court attention on the judgment of Hon'ble Supreme Court which reported in 1983(4) SCC 625 in between Cotton Corporation of India Ltd., Vs United Industrial Bank Ltd & Ors., and also drawn the court attention on the judgment of Hon'ble Supreme Court which reported in 2005 (9) SCC 733. On careful personal of these decisions, in the said decisions their lordship held that the court has no jurisdiction either under Sec.41(b) of Specific Relief Act or under inherent powers under Sec.151 of CPC to grant temporary injunction, a person from instituting any proceedings which such person is otherwise entitled to institute in a court not subordinate to that 50 Com.A.A.No.134/2021 from which the injunction is sought and debter bank not entitled to an interim injunction restraining the creditor from presenting a winding up petition against the bank and if final relief cannot be granted temporary injunction is also cannot be granted.
34. In the instant petition the petitioner has approached the court and sought for mandatory injunction to supply the power in terms of the agreement which taken place in between them as per the power purchase agreement. On the other hand, the respondent No.1 and 2 have taken up the contention that the petitioner has not paid the bill amount and due to Covid-19 pandemic and other difficulties could not supply the power and agreement is already terminated, but the facts which involved in the present case and the facts which involved in the decision which relied are different. Therefore, the arguments which advanced by the learned counsel for the respondents on this aspect holds no water.
35. It is an admitted fact in response of the notice, the respondent No.1 and 2 were appeared through their respective counsel and filed their objection statement in which have taken up the contention that due to Covid-19 pandemic they could not supply the power to the petitioner and the petitioner has not paid 51 Com.A.A.No.134/2021 the bill amount and the respondents were also facing other difficulties. They were unable to supply the power. Admittedly the petitioner has filed the instant petition on 24.08.2021 and sought for interim exparte order directing the respondents to supply power of 7,35,000 KW units every month as per the power purchase agreement dated 09.10.2017 and novation agreement dated 25.01.2021. So considering the materials on record as well as the facts and circumstances of the case, this court was granted exparte order on 26.08.2021 and exparte order which passed by this court was time to time extended till this day and the petitioner has not raised any objection till this day that the respondents were not complied as per the orders passed by this court. Now the question is whether the provision which quoted in the petition empowers this court to grant the relief as prayed in the petition. So this court drawn its attention on Sec.9 of the Arbitration and Conciliation Act which reads like this:
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;52 Com.A.A.No.134/2021
(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.53 Com.A.A.No.134/2021
The above provision is very much clear a party may before or during arbitral proceedings or at any time after making of arbitral award but before its enforcement in accordance with Sec.36 sought for interim measures for preservation interim custody, detention, inspection of any property, interim injunction and such other interim measure of protection as may appear to the court. In the instant case, the petitioner has come up with instant petition and sought for interim measures for mandatory injunction to direct the respondents to supply power till initiation of arbitration proceedings or till the disposal of the Arbitration proceedings. Admittedly the petitioner got issued a notice about initiation of arbitral proceedings on 23.08.2021, that itself is clear the petitioner is already taken steps for initiation of the Arbitral proceedings. The Respondent though has raised the objection regarding termination of contract, price difference and also about its difficulty to supply the power as the provision which referred above is not permitting to decide all the objections which raised either to conduct trial or mini trial to consider the objection which raised by the respondents and the respondents are at liberty to raise their objection before the Arbitral Tribunal. So, considering all these aspects and the materials on record are clear that the prima-facie case and balance of convenience lies in favour of the 54 Com.A.A.No.134/2021 petitioner. If the relief as sought in the petition is not granted the petitioner will be put to irreparable loss and injustice. Hence, I am of the opinion that the point No.1 and 2 are answered as affirmative and point No.3 is answered in favour of the petitioner.
36. POINT NO.2: In view of my answer to point No.1 as stated above, I proceed to pass the following;
ORDER The petition under Sec.9 of Arbitration and Conciliation Act r/w clause 10(3) of the Commercial Courts Act which filed by the petitioner is hereby allowed.
The respondents are hereby directed by way of mandatory injunction to supply uninterrupted power/ electricity of 7,35,000 KW units every month to the petitioner in terms of the power purchase agreement dated 09.10.2017 and novation agreement dated 25.01.2021 till initiation of the arbitral proceedings or 90 days which ever is earlier.
(Dictated to the Stenographer, transcript thereof corrected by me and then pronounced in the open court on this the 23rd day of November, 2021) (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City