Orissa High Court
Birat Chandra Dagara vs Taurian Exim Pvt. Ltd. And Anr. on 18 March, 2005
Equivalent citations: AIR2005ORI147, AIR 2005 ORISSA 147, 2006 (1) ABR (NOC) 44 (ORI)
Author: L. Mohapatra
Bench: L. Mohapatra
JUDGMENT L. Mohapatra, J.
1. This appeal is directed against the order dated 17-5-2003 passed by the learned Civil Judge (Senior Division), Rairangpur in 1. A. No. 12 of 2003 restraining the appellant from managing, operating, raising, extracting Iron Ores from Suleipat Mines and from interfering with the management, operation, raising, extraction of iron ores from the said mines in terms of Power of Attorney dated 9-7-2002 till disposal of the suit.
2. Respondents have filed Civil suit No. 38 of 2003 in the Court of the learned civil Judge (Senior Division), praying for a declaration that the deed of revocation dated 16-7-2002 is void, illegal and inoperative and for further declaration that in view of the registered Irrevocable Power of Attorney dated 9-7-2002 executed by the sole defendant in favour of the plaintiff No.l and backed by payments as indicated in the plaint, the plaintiff-respondents are entitled to operate the suit schedule mine as described in Schedule-A and for permanent injunction. In the said suit an application under Order 39, Rule 1 C. P. C. was filed by the respondents for restraining the appellant from managing, operating, raising or extracting iron ore from the said mines and also to restrain the appellant from interfering with the management, operation, raising or extraction of Iron Ores from the said mines. Said application filed by the respondents having been allowed, the present appeal has been preferred by the defendant.
3. Case of the plaintiffs-respondents is that the defendant appellant had been granted mining lease in respect of Suleipat Iron Ore Mine covering an area of 1527.10 acres or 618 Hectares for the purpose of mining. Said defendant -appellant was not able to operate the mine for want of technical know-how, paucity of funds and as such persuaded the plaintiff-respondents to advance a sum of rupees ninety eight lakhs and operate the mine under an Irrevocable Power of Attorney. The plaintiff respondents agreed to the suggestion and the defendantappellant also agreed that in lieu of advance he shall execute an irrevocable Power of Attorney in favour of the plaintiff No. 1 - Company and alternatively suggested that he is ready and willing to transfer permanently his leasehold right in respect of Schedule-A mine after obtaining due permission from the authority and that during the interregnum period, i.e. from the date of advancement/execution of Irrevocable Power Attorney till the date of execution and registration of final document of transfer, the absolute right to manage, operate the Mine in question, raise, transport and sale the ore shall rest with the plaintiffs on the basis of the Irrevocable Power of Attorney. The Plaintiffs-respondents accepted such suggestion of the defendant-appellant and accordingly advanced a sum of rupees seventy six lakhs in between 21 -6-2002 and 26-7-2002. Apart from the above amount, the plaintiff-respondents also paid Rs. 22 lakhs in cash on different dates making it total amount of Rs. 98.00 lakhs in total. The defendant appellant in due procedure of law executed a general Irrevocable Power of Attorney and registered the same on 9-7-2002, Under the terms of the said Power of Attorney the plaintiffs respondents were to take possession, manage works, raise, dispatch and sell minerals from the said mine. However, after receipt of the aforesaid amount and execution of the Irrevocable Power of Attorney suddenly the defendant appellant revoked the Power of Attorney on 16-7-2002. Challenging the said revocation a suit was filed for the relief as stated earlier.
4. The defendant-appellant entered appearance in the suit and filed written statement denying the allegations made in the plaint in general though execution of the registered power of Attorney and revocation thereof were admitted. It is specific case of the defendant-appellant that though Irrevocable Power of Attorney was executed on 9-7-2002 before the same was acted upon it was revoked on 16-7-2002 and therefore the plaintiffs have not acquired any right under the Power of Attorney to maintain the suit or seek for injunction. Apart from the above ground, the defendant-appellant has also Challenged the maintainability of the suit on the ground that the Mining department of the Government of Orissa being the owner of the mine in question should have been made a party to the suit and in absence of Mining department the suit is not maintainable. Similar averments were also made in the objection filed by the plaintiffs-respondents to the petition filed under Order 39, Rule 1 & 2 C. P. C. The trial Court on consideration of the cases of the parties as well as the documents produced before it found prima facie case in favour of the plaintiffs respondents and held that unless an order of Injunction is granted the plaintiffs-respondents shallput to irreparable loss.
5. Challenging the aforesaid order Sri Jagannath Patnaik, learned senior counsel appearing for the defendant-appellant submitted that whenever there is a breach of contract the party suffering from such breach is entitled to compensation and therefore the trial Court could not have passed an order of injunction. Apart from the above ground, it was contended by Sri Patnaik that though Irrevocable Power of Attorney was executed on 9-7-2002 before it was acted upon the same was revoked on 16-7-2002 and therefore the plaintiffs-respondents did not acquire any right at all under the said Power of Attorney and accordingly the Court should (not) have granted an order of injunction.
Shri Indrajit Mohanty, learned counsel appearing for the plaintiffs-respondents supporting the impugned order submitted that once an irrevocable Power of Attorney is executed the same cannot be revoked and revocation of said Power of Attorney is illegal and not. binding on the respondents. In course of argument Shri Mohanty also submitted that for operating mines the plaintiffs-respondents have already invested huge amount of money and possession having been delivered to them pursuant to execution of Power of Attorney they have a prima facie case to establish before the trial Court. It was further submitted by Sri Mohanty that the undisputedly the plaintiffs-respondents have paid a sum of Rs. 98/- lakhs to the defendant-appellant and apart from the above huge amount of money has already been invested in the said mines pursuant to the suggestions made by the defendant appellant and execution of Irrevocable Power of Attorney. According to Sri Mohanty if an order of injunction is not granted the plaintiff-respondentst shall be put to irreparable loss and they being in possession of mines, balance of convenience lies in their favour.
6. On reading of the plaint as well as written statement it appears that the appellant had been granted mining lease of 618 hectares of land covering ten villages. A copy of the Power of Attorney executed on 9-7-2002 was produced before the Court for perusal. The purpose of execution of the Power of Attorney as it appears is to appoint persons for assisting in raising and dispatching minerals from the mines. This is evident from the third paragraph of the Power of Attorney. However, the contents of the Power of Attorney indicate that the respondents shall take over possession, manage works, raise, dispatch and sell minerals from the mines he can appoint, engage supervisor, employees and other persons for the purpose of carrying out the above mining operation according to law and other allied activities and shall also exercise all control over such affairs. Clauses 12 and 13 which are material for the purpose of this case are quoted below :
"Clause-12 - The Power of Attorney shall remain operative till above mining lease over Suleipat Iron Mines expires or the transfer of the same in favour of M/s. Taurian Exim Pvt. Ltd. Takes place, whichever is earlier.
Clause-13 - This Power of Attorney shall remain operative till my above mining rights, Title and interest exists. It shall not be revoked by me during the subsistence of the residual period of the lease.
On reading of the aforesaid two clauses of the Power of Attorney it further appears that the appellant intended to transfer the disputed mines in favour of the respondent No. 1 and therefore a clause was introduced that the Power of Attorney shall remain operative till lease period expires or transfer takes place, which ever is earlier. Clause 13 also specifies that the Power of Attorney shall remain operative till the appellant's right, title and interest over the same continues and that it shall not be revoked during the subsistence of the residual period of the lease. In support of the aforesaid two clauses it further appears, prima facie, that an amount of Rs. 98 lakhs had been advanced to the appellant under various cheques and by way of cash payments. Therefore, intention of the party as it appears from their conduct as well as from 'the aforesaid two clauses contained in the Power of Attorney is that the appellant Intended to transfer the lease in favour of the respondents during subsistence of the Power of Attorney and therefore had agreed under the said Power of Attorney that the same shall continue to operate till expiry of the lease period or transfer of the same in favour of the respondent No. 1 which ever is earlier. In absence of such a clause there would not have any occasion for the respondent No. 1 to pay a huge amount of Rs. 98 lakhs to the appellant. Though in the written statement payment of Rs. 98 lakhs appears to have been denied, during course of argument Sri Jagannath Patnaik, learned counsel appearing for the appellant submitted that the entire amount has been deposited in a criminal case initiated under Section 138 of the Negotiable Instruments Act. Therefore, the contention of Sri Mohanty, learned counsel appearing for the respondents that for the purpose of transfer of the lease in favour of the respondents an advance of Rs. 98 lakhs had been made is acceptable.
The question that arises for consideration is as to whether having executed an irrevocable Power of Attorney, appellant can revoke the same by another instrument. Revocation has been done by a registered instrument and copy thereof has been produced before the Court for perusal. Ground on which revocation has been made is that the holder of the Power of Attorney failed to come to Rairangpur on 9-7-2002 to sign agreement with the executant in respect of the modalities of the execution of various clauses contained in the Power of Attorney. Therefore, the executant had no other alternative but to cancel the Power of Attorney. On perusal of the Power of Attorney it appears that there is no such clause under which the respondent was under an obligation to come to Rairangpur on 9-7-2002 and sign an agreement with the appellant in respect of the modalities of the execution of various clauses of the Power of Attorney. Therefore, the ground on which revocation has been made does not flow from the contents of the Power of Attorney dated 9-7-2002.
7. Section 202 of the Contract Act provides that when an agent has himself an interest in the property which forms subject matter of the agency, the agency cannot, in absence of an express contract, be terminated to the prejudice of such interest. Learned counsel appearing for the respondents also cited a decision of the Apex Court in the case of Seth Loon Karan Sethia v. Ivan E. John, to support the contention that the respondents having an interest in the leasehold area under the Power of Attorney the same cannot be revoked causing prejudice to the respondents. It is clear from the Power of Attorney that the appellant intended to transfer the leasehold area in favour of the Respondent No. l and prima facie also as suggested by the learned counsel for the parties it appears that the appellant had received Rs. 98 lakhs. Therefore, Tam of the view that an interest was created in favour of the respondent No. 1 in the property and therefore such agency cannot, in absence of any express contract, be terminated to the prejudice of such interest. I, therefore, find prima facie case in favour of the'respondents.
8. Shri Jagannath Patnaik, learned senior counsel appearing for the appellant referring to Section 205 of the Contract Act submitted that where there is an express or implied contract that the agency should be continued for any period of time, principal must make compensation to the agent or the agent to the principal, as the case may be, for any previous revocation or renuhciation of the agency without sufficient cause. Referring to the aforesaid provision it was contended by Sri Patnaik that under this provision the respondents are entitled to compensation and therefore there is no irreparable loss to the respondents which cannot be compensated. Having held that Section 202 of the Contract Act prima facie appears to be applicable to the facts of the present case, I am of the view that no such revocation of Power of Attorney could be made to the prejudice of the interest created in favour of the respondents. From the reading of the plaint it appears prima facie that pursuant to execution of Power of Attorney the respondents had taken steps for carrying out the responsibilities conferred on them under the Power of Attorney and therefore I am of the view that balance of convenience also lies in favour of the respondents.
9. In view of the discussions made above, I do not find any reason to interfere with the impugned order and accordingly the appeal is dismissed.