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Showing contexts for: negative covenant in Rajasthan State Electricity Board, ... vs Hindustan Brown Boveri Ltd., Bombay on 11 October, 1968Matching Fragments
4. In resisting the contentions of the Company it was argued on behalf of the Board before the learned Judge that the court had no power to make any order under Section 41(2) of the Arbitration Act read with Schedule II thereof, because there was no negative covenant in the alleged agreement between the Company and the Board and it is only where there was a negative covenant that an injunction of the kind that was prayed for could be issued by the court. The arguments then proceeded regarding the existence of the so-called negative covenant in the alleged agreement. It was argued on behalf of the Company that the Board had admittedly invited tenders of a quantity lesser than the quantity which had been agreed to be purchased from the Company and this showed that there was a negative contract inasmuch as the Board was not entitled to purchase the quantity less than the balance quantity lying with the Company for despatch.
The learned Judge repelled the submission of the Board that the Company could at the most claim the cost of the material which could be assessed in terms of money. The learned Judge also thought that as the Company was prepared to deliver the goods, but the Board was refusing for no reason, to accept the delivery and the company's material was blocked and so was the money and as the damages cannot be adequately compensated, the balance of convenience was in favour of the Company.
5. In assailing this order it was contended by Mr. Agarwal appearing for the Board that the court had no jurisdiction to grant a temporary injunction of the kind as no permanent injunction could have been granted in a suit of the kind for restraining the Board from committing the so-called breach of the contract. It was next argued that there was no negative covenant of the kind spelt out by the learned Additional District Judge. It was maintained that in the absence of there being any negative covenant the learned Additional District Judge had assumed jurisdiction by deciding the conditional fact for the exercise of his jurisdiction wrongly. It was argued that in a case of the kind it cannot be predicated that there will be no standard for measuring the damages or compensation even if it were assumed that the Board is acting in breach of the contract.
Learned counsel for the respondent placed reliance on Venkatagiri v. H. R. E Board, Madras, AIR 1949 PC 156, Keshardeo v. Radhakishen, AIR 1953 SC 23. M. L. and B. Corporation v. Bhutnath, AIR 1964 SC 1336, Abbasbhai v. Golamnabi, AIR 1964 SC 1341 and Pandurang v. Maruti, AIR 1966 SC 153. Reliance was placed on Rehmatunnissa Begum v. Price, ILR 42 Bom 380: (AIR 1917 PC 116) and AIR 1940 Cal 466. On the basis of the Bombay case it was submitted that the matter lay within the discretion of the Additional District Judge and in such a discretionary matter there should be no interference in revision. On the basis of Jairam Valjee case AIR 1940 Cal 466 it was contended that a negative covenant has to be implied on account of the nature of the contract between the parties. In other words, even if the contract was only affirmative so far as the supply that was to be made by the Company to the Board was concerned; it would imply in the circumstances a negative covenant for not purchasing the supply from any other source as long as the contract subsisted.
These observations made at different places in the judgment under revision leave no room for doubt that what the learned Judge was thinking related to the so-called existence of a negative covenant qua the quantity of goods that was already manufactured and was available for despatch. He had not at all devoted consideration to the actual facts of the case. Thus, the conclusion that he reached pertained, in his own words, to the quantity of goods already manufactured by the Company. The operative order that he passed is for the entire quantity of 9000 kilometers of All Aluminium Conductors. Thus, in my view, the learned Additional District Judge has committed an error about the existence of a so-called negative covenant in that he fettered himself by the premise that he formulated that the negative covenant for the quantity in hand was to be inferred. This error, in my view, is nothing but a jurisdictional error and it is idle to contend that a revision against the order of the Additional District Judge, in the circumstances, was not competent.