Karnataka High Court
Vestas Wind Technology India Private ... vs Ramgad Minerals & Mining Private ... on 30 January, 2018
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF JANUARY 2018
BEFORE
THE HON'BLE MR. JUSTICE SREENIVAS HARISH KUMAR
MISCELLANEOUS FIRST APPEAL No.8387 OF 2017(CPC)
C/W
MISCELLANEOUS FIRST APPEAL No.8388 OF 2017 (CPC)
In MFA No.8387 of 2017 (CPC)
BETWEEN
Vestas Wind Technology India
Private Limited
A company incorporated under the
Companies Act, 1956 having its
registered office at No.298,
Old Mahabalipuram Road,
Sholinganallur,
Chennai-600119.
Also at:
ASV Avantt, 3rd Floor,
No.3/370(148), Rajiv Gandhi Salai,
Thoraipakkam,
Chennai-600119.
Represented by its
Regional Service Head Karnataka Region.
And authorized signatory Mr. G Shivakumar.
...Appellant
(By Sri.Srinivas Raghavan, Advocate, for Sri Ajay J
Nandalike & Yashodhar Hegde, Adv., )
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AND
Ramgad Minerals & Mining Private Limited
A company incorporated under the
Companies Act, 1956 having its
Corporate office at Baldota Enclave
Abheraj Baldota Road,
Hospet-583203.
Also At:
26/20, Abshot Layout,
Vasant Nagar,
Bangalore-560051
Represented by its Vice President
Power Mr. K.VS. Subrahmanyam
...Respondent
(By Sri. Ganapathi Hegde, Advocate, for M/s Dua
Associates, Advocates)
This MFA is filed under Order 43 Rule 1(r) read
with Section 104 of CPC, 1908 against the order dated
26.10.2017 passed on I.A.No.II in O.S.No.5692/2017 on
the file of the II Additional City Civil and Sessions
Judge, Bengaluru City (CCH-17), allowing I.A.No. II filed
under order 39 Rule 1 and 2 of CPC.
In MFA No.8388 of 2017 (CPC)
BETWEEN
Vestas Wind Technology India
Private Limited
A company incorporated under the
Companies Act, 1956 having its
registered office at No.298,
3
Old Mahabalipuram Road,
Sholinganallur,
Chennai-600119.
Also at:
ASV Avantt, 3rd Floor,
No.3/370(148), Rajiv Gandhi Salai,
Thoraipakkam,
Chennai-600119.
Represented by its
Regional Service Head Karnataka Region.
And authorized signatory Mr. G Shivakumar.
...Appellant
(By Sri.Srinivas Raghavan, Advocate, for Sri Ajay J
Nandalike & Yashodhar Hegde, Adv., )
AND
MSPL Limited
A company incorporated under the
Companies Act, 1956 having its
Corporate office at Baldota Enclave
Abheraj Baldota Road,
Hospet-583203.
Also At:
26/20, Abshot Layout,
Vasant Nagar,
Bangalore-560051
Represented by its Vice President
Power Mr. K.VS. Subrahmanyam
...Respondent
(By Sri. Ganapathi Hegde, Advocate, for M/s Dua
Associates, Advocates)
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This MFA is filed under Order 43 Rule 1(r) CPC,
against the order dated 26.10.2017 passed on I.A.No.II
in O.S.No.5691/2017 on the file of the II Additional City
Civil Judge, Bangalore, (CCH-17), allowing I.A.No.II filed
under Order 39 Rule 1 & 2 of CPC.
These appeals coming on for admission, this day,
the court delivered the following:
JUDGMENT
These two appeals are disposed of by a common judgment as the facts and circumstances in them are same.
2. The defendant in O.S.5692/2017 on the file of II Additional City Civil Judge, Bengaluru, is the appellant in MFA 8387/2017 and likewise the defendant in O.S.5691/2017 has preferred MFA 8388/2017. The parties are referred with respect to their rank in the suits for the sake of convenience. The brief background that culminated into preferring these two appeals are as follows :-
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3. The plaintiff in respective suit is a company registered under the provisions of the Companies Act. They generate wind power energy. The defendant is also a company registered under the Companies Act; it manufactures wind turbines or wind mills and provides operation and maintenance services to those companies or business concerns that have commissioned the wind turbines. The plaintiff upon representation made by the defendant executed three agreements, namely (1) agreement for supply of wind turbines (2) agreement for erection and commissioning of wind turbines (3) agreement for annual operation, maintenance and security of wind mills. All these agreements were executed on 4.3.2003 and 29.7.2003 for establishing and commissioning of wind mills at Gudda Rangaravanahalli, Goonor in Chitradurga District. Pursuant to these agreements, the wind mills were established and were commissioned. In terms of the agreement, the defendant undertook the annual 6 operation and maintenance services (O & M). The agreements for O & M with the plaintiff companies do not contain termination clause. It was for a period of twenty years. The termination clause was consciously left out from O & M agreement and thereby the defendant consciously committed itself to the terms of the contract during the tenure of the agreements. The value of the O & M contract was not independent of other agreements entered into between the plaintiff and the defendant and the total values under each agreement was fixed after taking into consideration all the expenses including various input costs, inflation and all other external factors that may influence the transaction over a period of twenty years.
4. The defendant wanted to revise the O & M charges giving frivolous reasons and its intention was to make undue profit at the expense of the plaintiff. Such a demand was made by the defendant knowing very well 7 that the plaintiff would not accede to it. The revision of annual fee was opposed to the terms of the contract. It was informed to the defendant company that it should continue to provide O & M services as per the agreement. The defendant put forth enhancement of annual fee which was almost three times the existing O & M charges. The defendant, pursuant to its unscrupulous demand issued notice to the plaintiff on 11.8.2017 and terminated the O & M agreement dated 29.7.2003 without bearing in mind the damage that would be caused not only to the plaintiff but to the entire state. The stoppage of supply of power would directly impact the power generation in the State and thereby public interest would be adversely affected. Therefore, the plaintiff stated that the defendant was allowed to act on the termination of the agreements dated 4.3.2003 and 29.7.2003, the plaintiff would be constrained to close down its energy generation units which would in turn result in loss to be incurred by the 8 State and the consumers of electric energy being affected. The plaintiff further stated that the defendant had not imparted the proprietary knowledge required to operate and maintain the windmills nor did it train any of the plaintiff's personnel. For these reasons the plaintiff filed a suit seeking declaration that the termination letter dated 11.8.2017 issued by the defendant was null, void and inoperable and for permanent injunction to restrain the defendant from terminating the annual operation, maintenance and security contract dated 4.3.2003 and 29.7.2003 and to restrain the defendant further from stopping or suspending the O & M services. In the said suit, the plaintiff filed an application as per I.A.2 under Order XXXIX Rules 1 and 2 CPC seeking an order of temporary injunction restraining the defendant from acting upon its termination notice dated 11.8.2017.
5. The defendant contended that an order of temporary injunction as sought for by the plaintiff could 9 not be granted as the suit was barred under Section 14 (1)(c), Section 34 and Section 41 (e) and (h) of the Specific Relief Act. It also contended that the City Civil Court, Bengaluru, had no jurisdiction to try the suit. The cause of action did not arise at Bengaluru. The plaintiff wrongly pleaded that at the time of executing the agreement, the defendant had its marketing office at Bengaluru. The registered office of the defendant company is not situated in Bengaluru. The work contracts were executed at Chitradurga District and therefore the Court at Bengaluru lacked jurisdiction.
6. The defendant further pleaded that the sale of wind energy generators or the wind mills to the plaintiff envisaged three separate contracts to be executed between the parties. They were supply contract, erection and commissioning contract and operation and maintenance contract. Every contract was for a specific purpose. Though these contracts did not contain 10 specific termination clause, the terms of the contract and understanding between the parties was to the effect that in the event of non-performance of the contract or in the event of impossibility to perform the contract, it was terminable by one party by giving prior notice to the other. Even otherwise contract cannot be in perpetuity at the cost of one of the parties. Therefore the services under O & M Contract for over a period of fourteen years was to the complete satisfaction of the plaintiff. But owing to steep rise in input cost over the years for providing O & M services coupled with difficulties that the defendant was facing in getting reimbursements under machinery break down insurance policy procured by the plaintiff, the defendant requested the plaintiff on many occasions to revise the annual O & M fees. In this regard the defendant had meeting with the Vice President (Power) of the plaintiff on 7.10.2016. In the said meeting the said Vice President Mr. K.V.S. Subramanyam advised the defendant to send a revised 11 offer regarding the annual O & M fee to the plaintiff for consideration. On 16.11.2016 the defendant issued two letters containing the revised O & M fee along with general terms and conditions. Since the plaintiff did not respond to this, the plaintiff followed up the correspondence through e -mail on 23.12.2016 and 10.01.2017. Again one more email was sent on 25.01.2017 putting forward request for revision in O & M fees. The said Vice President replied by saying that he would revert to the defendant within two days. But no response was received. Therefore the Assistant General Manager and the Assistant Manager of the defendant Company met K.V.S. Subramanyam again on 06.03.2017. Thereafter the Director of the defendant Company Mr. Rajendran and Asst. Manager Mr. Raghupathi Raja met one Shrenik Baldota of plaintiff company at Mumbai on 24.03.2017. The defendant did not receive any response. All the efforts of the defendant to get the revision in O & M charges failed 12 and therefore on 27.05.2017, the defendant issued a letter terminating the contract with the plaintiff. After issuance of this termination letter, the plaintiff issued its response through its advocate on 14.7.2017 refusing to consent for revision of the O & M fee. In the said letter the plaintiff incorrectly stated that termination of the contract was in breach of the obligations as the contract did not provide for termination clause. To this letter the defendant replied through its advocate on 11.8.2017 stating that since the plaintiff was not interested in arriving at a mutually agreeably consideration, defendant was not in a position to provide O & M services at a loss. The defendant has referred to some correspondences which are not relevant to be mentioned here. With this back ground the defendant contended that the plaintiff had no prima facie case to seek an order of injunction. In these set of circumstances an order of injunction would not be granted. The plaintiff's own document show that it has 13 the option to engage a new service provider. Therefore the application deserved to be dismissed.
7. The learned trial judge after hearing the plaintiff and the defendant allowed the application I.A.No.2 and issued an order of temporary injunction restraining the defendant from acting upon the termination notice and stopping or suspending or abandoning the annual operation, maintenance and security services being provided by it under the contract dated 4.3.2003.
8. The learned trial judge, for granting an order of temporary injunction as prayed for by the plaintiff, has in regard to one specific contention taken by the defendant that the Bangalore Court has no jurisdiction, held that his court has jurisdiction. According to him, part of the cause of action arose in Bangalore as meetings were held on 7.10.2016 and 6.3.2017 at Bengaluru between the plaintiff company and the defendant company in regard to enhancement of O & M 14 fee. The learned counsel for the appellant/defendant assailed this finding by arguing that at any stretch of imagination the said two meetings did not give rise to part of cause of action. His argument was that according to Section 20 of the Civil Procedure Code, this suit should be filed at a place where the defendant voluntarily resides or carries on business or personally works for gain or at a place where cause of action wholly or in part arises. Then he referred to explanation to Section 20 to argue that the corporation should be deemed to carry on business at its sole or principal office in India or at such place where a subordinate office of the Corporation is situated if action has arisen at such place. Referring to Section 20 he argued that the corporate office of the defendant company is situated at Hospet and the windmills have been installed in Chitradurga district. Therefore this suit should be filed in either of these places. The court below has erroneously given a finding that it has 15 jurisdiction. In this regard he referred to the judgments of the Supreme Court in the case of NATIONAL TEXTILE CORPORATION LTD AND OTHERS vs. HARIBOX SWALRAM AND OTHERS [(2004) 9 SCC 786]; ALCHEMIST LIMITED AND ANOTHER vs STATE BANK OF SIKKIM AND OTHERS - [(2007) 11 SCC 335] and ABC LAMINART PRIVATE LIMITED AND ANOTHER vs AP AGENCIES, SALEM [(1989) 2 SCC 163].
9. The learned counsel for the respondent/plaintiff argued that the agreement between the plaintiff and defendant companies provide for suit being filed at Bengaluru, that the meeting that took place on 7.10.2016 and 6.3.2017 at Bengaluru was in connection with revision of O & M charges and therefore the part of cause of action arose at Bengaluru. The court has rightly held that it had jurisdiction. His further argument was that the trial court has to give 16 findings with regard to its jurisdiction. The defendant has filed two applications under Order VII Rule 11 (d) and Order VII Rule 10 CPC. These applications have not yet been disposed of. He also argued that the plaintiff company has got a branch office at Bengaluru. Therefore if the court expressed prima facie opinion at the time of deciding an application for temporary injunction, it did not amount to giving a finding on territorial jurisdiction. For these reasons this court while deciding the appeal cannot give a finding on the territorial jurisdiction of the court. He gathers support for his argument from the decisions of the Supreme court in the cases of KUSUM INGOTS AND ALLYOS LIMITED vs UNION OF INDIA AND ANOTHER - [(2004) 6 SCC 254] and MAYAR (H.K.) LIMITED AND OTHERS vs OWNERS AND PARTIES, VESSEL M.V.FORTUNE EXPRESS AND OTHERS [(2006) 3 SCC 100] and unreported judgment of this court in the case of DR. KRISHNA REDDY vs THE AIRCRAFT EMPLOYEES 17 HOUSE BUILDING CO-OPERATIVE SOCIETY AND OTHERS (RFA 159/2009).
10. On this point it is to be held that the court of first instance cannot grant an order of temporary injunction or any interim order, if it does not have territorial jurisdiction or pecuniary jurisdiction. It is true that the trial court has to decide whether it has got jurisdiction or not. It may be true that the two applications filed by the defendant under Order VII Rule 10 and Order VII Rule 11 CPC are pending adjudication. This cannot be the reason for not expressing any opinion by me as regards jurisdiction because the trial court has in its order has come to a clear conclusion that it has jurisdiction.
11. Perusal of the plaint makes it very clear that the plaintiff's suit is founded on contract between it and the defendant. Section 20 CPC makes it very clear that the suit must be filed in a court within the local limits of 18 whose jurisdiction the defendant resides or carries on business or personally works for gain or if there are more than one defendant, suit must be filed at a place where any one of them resides or carries on business or personally works for gain or where the cause of action wholly or in part arises. So this Section makes it very clear that it is the place of residence of the defendant or his business or the place where the cause of action arises either in whole or in part that decides the jurisdiction. The argument of the respondent's counsel that because of the existence of the branch of plaintiff company at Bengaluru, the court at Bengaluru has jurisdiction cannot be accepted. Explanation to section 20 should be understood as supplemental to the meaning that can be gathered from the Section. This Section makes no reference to the plaintiffs residence or place of business. Therefore the 'Corporation' as mentioned in explanation part only refers to the place where the defendant's principal office is situated. 19
12. The meeting said to have taken place in Bengaluru between the officers of the two companies in connection with revision of O&M fee cannot be construed as a part of cause of action. This meeting is in no way connected with the cause of action for the plaintiff to institute a suit. The cause of action actually in this case is breach of the agreement as has been alleged by the plaintiff. The windmills installed in the District of Chitradurga are to be maintained by the defendant company as per the agreement and for this defendant is entitled to a certain fee. If according to the plaintiff, the defendant went back upon the contract by terminating it, the actual cause of action is that event of termination. The meeting is not an integral part of the cause of action though the officers might have met at Bengaluru to discuss the issue. In this context, it may be relevant to place reliance on some of the judgments that the appellant/defendant's counsel has referred to. 20 In National Textile Corporation Limited (supra) the Supreme Court has observed below : -
"11. The question of jurisdiction was considered in considerable detail in Oil and Natural Gas Commission v. Utpal Kumar Basu 1994 (4) SCC 711 and it was held that merely because the writ petitioner submitted the tender and made representations from Calcutta in response to an advertisement inviting tenders which were to be considered at New Delhi and the work was to be performed in Hazira (Gujarat) and also received replies to the fax messages at Calcutta, could not constitute facts forming an integral part of cause of action. It was further held that the High Court could not assume jurisdiction on the ground that the writ petitioner resides in or carries on business from a registered office in the State of West Bengal".
13. In Alchemist Limited (supra), the Supreme Court held that for purpose of deciding whether facts 21 averred by the appellant-petitioner would or would not constitute a part of cause of action, one has to consider whether such fact constitutes a material, essential or integral part of the cause of action. In the case of ABC Laminart (supra) in para 15, it is observed as below :-
"15. In the matter of a contract there may arise causes of action of various kinds. In a suit for damages for breach of contract the cause of action consists of the making of the contract, and of its breach, so that the suit may be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore, can be filed at the place where it was made. The determination of the place where the contract was made is part of the Law of Contract. But making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. ...... In suits for agency actions the cause of action arises at the place where the contract 22 of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract........."
14. The learned counsel for the respondent/plaintiff has referred to Kusum Ingots and Alloys Limited (supra). In this decision what is held is that even a small fraction of cause of action accrues within the jurisdiction of the High Court, that High Court will have jurisdiction in the matter. It is needless to state that the learned counsel has referred to this judgment in the background of his point of argument that the meeting held at Bengaluru gave rise to part of cause of action.
15. Another ruling that the respondent/plaintiff's counsel has referred to is in the case of Mayar (HK) Limited and others (supra). In para 18 of this judgment, the Supreme Court has defined the meaning 23 of the expression 'material facts' and in para 32 it is held that the court cannot arrive at a finding of a particular place being the principal place of business at a preliminary stage of the hearing of the suit. It is evident that this judgment is referred to for the reason that this court cannot express any opinion regarding jurisdiction as it is an issue to be decided primarily by the trial court. It is already observed by me that because the trial court has expressed an opinion that it has jurisdiction, this finding has incidentally arisen in this appeal and it has to be examined in this appeal. Therefore, this ruling is not helpful to the respondent.
16. The unreported ruling of this court in the case of Krishnareddy (supra) contains discussion with regard to rejection of plaint under Order VII Rule 11 CPC for not disclosing cause of action. No doubt this court has dealt with the meaning of the expression 24 'cause of action', but this judgment is not helpful to the respondent.
17. As has been held by the Supreme Court in the judgments referred to by the appellant's counsel and especially in regard to the principle laid down in the case of ABC Laminart Private Limited, I am of the opinion that the finding given by the trial court that it has jurisdiction in view of part of cause of action having arisen at Bengaluru cannot be accepted. The meeting cannot be considered as giving rise to part of cause of action.
18. The learned counsel for respondent argued that the agreement contain a clause that the courts at Bengaluru have jurisdiction, and thus the suit is very much maintainable. It is well settled that parties, by their agreement, cannot confer jurisdiction on a court at a particular place.
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19. The trial court has held that the respondent/plaintiff has made out a prima facie case; balance of convenience lies in its favour and that it suffers a great deal of hardship if temporary injunction is not granted. According to the trial court, the defendant through its letters dated 16.11.2016, 27.5.2017 and 11.8.2017 unilaterally sought revision in the annual O&M fee and this was not accepted by the plaintiff. It has been held that there was no fault on the part of the plaintiff and very particularly the contract with regard to O&M is not terminable for a period of twenty years. Especially in view of MOU dated 13.1.2003, there is implied negative covenant as contemplated under Section 42 of the Specific Relief Act and, therefore, the defendant was bound to provide services to the plaintiff for a period of twenty years. Further finding is that the agreements in question disclose that it is the duty of the defendant to have liasoning with KRDL and KPTCL. The contention of the 26 defendant that it has entered into non-binding MOU dated 13.1.2003 is not acceptable. Since the plaintiff has entered into contract with KPTCL for generation and supply of power for twenty years, the termination of the contract by the defendant has forced the plaintiff to become a defaulter. The stoppage of supply by the plaintiff to KPTCL affects the consumers of the electric power and therefore the interest of the public at large is involved. For these reasons there is a case for granting temporary injunction.
20. He argued that a stipulation in the O & M agreement that the defendant should provide service to plaintiff for 20 years, does not include a negative covenant, either express or implied. The undertaking given by the defendant to provide 20 years service cannot be construed as having agreed impliedly that the contract is not terminable. The agreement provides for annual revision of O & M fee, that the plaintiff is bound 27 to pay the fee for maintenance of wind mils by the defendant, and if the plaintiff is not agreeable for revision in fee and if it does not make payment, contract has to be terminated. In fact what is absent is negative covenant and present impliedly is power to terminate.
21. The counsel for respondent argued that if the contract by its nature is determinable, there must be a clause for determination. The contract with defendant is composite; it cannot contend that it did not benefit it. The defendant has undertaken to provide service for 20 years; this implies that the parties have understood that the termination is excluded, therefore presence of negative stipulation is implied. For this reason, Section 42 of the Specific Relief Act is applicable and the trial court has rightly applied law to grant injunction against the defendant.
22. Perusal of the O & M agreement shows that it does not contain a clause for termination of contract; 28 rather it stipulates that the defendant has to provide service for 20 years; however, condition No.1 states that O & M charges can be increased every year at the rate of 5% over the charges paid for previous year. Therefore the question that arises is, "Can't the contract be terminated by the defendant because it had agreed for providing service for 20 years if the plaintiff did not agree for revision of charges?" As the learned counsel for the respondent referred to Section 42 of the Specific Relief Act and argued that by implication, presence of negative clause in the agreement prohibiting the termination can be made out, it is necessary to examine the meaning of 'negative contract' as applicable to the facts and circumstances of this case.
23. The learned counsel for appellant has placed reliance on a decision of the Gujarat High Court in VINOD CHANDRA HIRALAL GANDHI vs VIVEKANAND MILLS LIMITED, (AIR 1967 GUJ 255). In this case, 29 the plaintiff textile mill appointed defendant No.1 as a technician in its mills with a condition that he should serve in the mills for a period of 5 years. As the defendant tendered resignation before expiry of 5 years, the textile mill did not accept resignation. When the defendant threatened to leave the service, the textile mill sued him claiming injunctive relief. In this context, it was held below :-
"7. It is, therefore, clear that in order to found a case for an injunction under Section 42, there must be a negative stipulation. The negative stipulation may be express or implied but it must be a distinct negative stipulation. The negative stipulation cannot be implied merely from the existence of the affirmative stipulation: the affirmative stipulation does not of itself imply a negative stipulation to do nothing inconsistent with it".
24. The respondents' counsel has also referred to a judgment of the Calcutta High Court in BURN & 30 CO. vs. MCDONALD [ILR 36 CAL 354] to argue that the court can import negative quality into an affirmative agreement. In this case also, the employee was sought to be restrained by company when he wanted to leave that company to join another company. In that context, it was held as below:-
"I feel no doubt about it. Here the covenant is that the defendant will diligently and to the best of his ability devote himself to the duties as a draftsman and general assistant. Surely when a man says that he will devote himself during a period of years to the business of a particular firm, it does imply that he will not give his services during that period to any other firm".
25. Reliance is also placed by the respondents' counsel to the judgment of the Supreme Court in GUJARAT BOTTLING CO. LTD AND OTHERS vs COCA COLA CO. & OTHERS [(1995) 5 SCC 545]. In para 42 it is held as below:-
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"42. In the matter of grant of injunction, the practice in England is that where a contract is negative in nature, or contains an express negative stipulation, breach of it may be restrained by injunction and injunction is normally granted as a matter of course, even though the remedy is equitable and thus in principle a discretionary one and a defendant cannot resist an injunction simply on the ground that observance of the contract is burdensome to him and its breach would cause little or no prejudice to the plaintiff and that breach of an express negative stipulation can be restrained even though the plaintiff cannot show that the breach will cause him any loss. [See: Chitty on Contracts, 27th Edn., Vol.1, General Principles, para 27- 040 at p.1310; Halsbury's laws of England, 4th Edn. Vol. 24, para 992]. In India section 42 of the Specific Relief Act, 1963 prescribes that notwithstanding anything contained in clause (e) of Section 41, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a 32 certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement. This is subject to the proviso that the plaintiff has not failed to perform the contract so far as it is binding on him. The Court is, however, not bound to grant an injunction in every case and an injunction to enforce a negative covenant would be refused if it would indirectly compel the employee either to idleness or to serve the employer. [See: Ehrman v. Bartholomew. (1927) W.N. 233; N.S.Golikari (supra) at p.
389]".
26. On analysis of the case law, it is to be stated that, an affirmative stipulation does not always lead to infer an implied negative stipulation as has been held by the Gujarat High Court. Even if such a negative stipulation is expressly stated or can be said to be implicit in the contract, as has been held in Gujarat Bottling, the court is not bound to grant an injunction, 33 because Section 42 of the Specific Relief Act contains a rider "the plaintiff has not failed to perform the contract so far as it is binding on him". I refer to this aspect later as the appellants counsel submitted that the plaintiff has failed to perform his part of the contract. Now applying Section 42 to the facts of this case, I need to state that defendant's agreeing to provide service for 20 years, does not strengthen the plaintiff to urge that he cannot terminate the contract, the reason being that the defendant wanted enhancement in annual maintenance charges, probably more than what is stipulated in the agreement in view of escalation in market price. It is not as though the defendant terminated the agreement without any reason; it was only after plaintiff showing no inclination at least to respond to defendants demand. The agreement provides for revision of O & M charges, and therefore no negative stipulation can be imported.
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27. The next point argued by the appellant's counsel is that a suit for mere injunction, in the background of the circumstances pleaded by the plaintiff, it not maintainable. He referred to Section 41
(e) and (h) of the Specific Relief Act. He also argued that the plaintiff could not have instituted a suit for specific performance, as the contract between the parties is not enforceable according to Section 14 (1) of the Specific Relief Act. He argued that Section 14(1) is applicable because the plaintiff has to claim damages if it has really sustained loss owing to termination of contract; and even if suit for specific performance had been filed, the court will refuse decree if the nature of contract is as such that its enforcement is impossible. He has referred to a judgment of Allahabad High Court in the case of UNION CONSTRUCTION CO. (PVT. LTD) vs. CHIEF ENGINEER, EASTERN COMMAND, LUCKNOW AND ANOTHER [AIR 1960 ALLAHABAD 72] and the Supreme Court in the case of INDIAN OIL 35 CORPORATION LTD vs AMRITSAR GAS SERVICE AND OTHERS [(1991) 1 SCC 533].
28. The learned counsel for the respondent argued the very same point that suit for injunction is maintainable to enforce the negative agreement, as compensation is not adequate remedy.
29. Section 41(e) of the Specific Relief Act states that no injunction can be granted to prevent a breach of contract which is not enforceable. Section 14 of the Act deals with contract which cannot be specifically enforceable. Section 38 (3) (c) of the Specific Relief Act states that injunction can be granted in the case of invasion on plaintiff's right, if compensation in money cannot afford adequate relief. Reading all these sections conjointly makes the position clear that the plaintiff in order to claim relief of injunction, must show firstly that the contract between him and the defendant is enforceable to prevent its breach and secondly that any 36 amount of compensation in terms of money should appear to be inadequate to remedy the injury . If these principles are applied to the case on hand, it can be very well said that the loss that the plaintiff suffers due to discontinuance of service of maintenance of wind mills by the defendant can be compensated. It is not as though that the plaintiff is not in a position to engage other service providers. The defendant has provided the names of some other service providers. If power generation has been stopped, due to termination of contract, and such termination is illegal or contrary to terms of contract, the plaintiff can sue for damages also. The nature of O & M agreement between the parties appears to be as such that the court cannot enforce it, and even if a decree is granted, the court may have to continuously supervise the performance. In a judgment of the Delhi High Court in the case of RAJASTHAN BREWERIES LIMITED VS. THE STROH BREWERY COMPANY, [2000 (55) DRJ], it is held that for unilateral 37 termination of technical know how agreement, remedy available to the aggrieved party is to seek compensation. Therefore the conclusion to be drawn is that the suit brought by plaintiff appears to be not maintainable.
30. There is one more point to be mentioned, this is the point about which it is said in one of the paragraph above that it would be dealt with later. The appellant's counsel argued that the plaintiff company is due in a huge sum of money towards O & M charges for previous years. No documentary proof is placed; also it appears that this point has not been argued before the court below. If it is assumed that the plaintiff is due to defendant in a certain sum of money, proviso to Section 42 as also Section 38(2) of the Specific Relief Act become applicable to hold that the plaintiff cannot seek injunction for breach of obligation on its part.
31. In the light of above discussion, it is to be stated that the trial court has erroneously given a 38 finding that the plaintiff has made out a prima facie case. It has just proceeded on the ground that contract is not terminable as the defendant is under an obligation to provide service for twenty years. The other findings of the trial court that balance of convenience lies in favour of plaintiff and it also faces irreparable loss as stoppage of service by defendant, affects the consumers of power, cannot be accepted. Coming to this kind of conclusion on extraneous reasons is not permitted. Reasons assigned by the trial court are perverse and arbitrary. Hence, I conclude that these appeals deserve to be allowed, and the following order.
i) Appeals are allowed with costs. ii) Order dated 26.10.2017 passed on IA Nos. II
filed in both the suits under Order 39 Rules 1 & 2 CPC is set aside. Applications are dismissed.
Sd/-
JUDGE ckl/sd