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Showing contexts for: exparte interim injunction in Ivrcl Infrastructure And Projects ... vs Befesa Agua on 21 September, 2011Matching Fragments
R.BANUMATHI,J.
This Intra Court Appeal is filed challenging the order of exparte interim injunction granted in O.A.No.679 of 2011 (18.8.2011) under Section 9 of the Arbitration and Conciliation Act. With consent of the learned counsel appearing for the appellants and the respondent, the main appeal itself was taken up for final disposal.
2. The 1st appellant and respondent Company having its Head Office at Spain have entered into a joint venture for the purpose of construction, start up maintenance during operation period of 25 years of Desalination Plant. After award of International Tender by Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), pursuant to the joint venture, the shareholders agreement was entered into between the 1st appellant and the respondent Company on 31.8.2005. The Respondent is a shareholder holding a total of 4,32,45,804 equity shares of value of Rs.10 each representing the total value of Rs.43,24,58,040/-. Appellants 1 and 2 are joint venture partners together holding 75 percent share in the 3rd appellant Company. To implement the project, parties have entered into various agreements on 5.1.2007 and as per these agreements, 3rd appellant has to produce 100,000 cubic metres of potable water in accordance with the requirements of the Bulk Water Purchase Agreement that was entered into by the 1st appellant with CMWSSB. Due to various reasons, the target of the project could not be achieved and on extension by CMWSSB, the target was later achieved on 25.07.2010. Certain disputes have arisen between the 3rd appellant and CMWSSB, which were referred to Dispute Resolution Board and it is stated that the disputes are now pending arbitration.
10. The applicant is directed to comply with the provisions under Order 39 Rule 3 CPC.
8. Challenging the impugned order, the learned counsel for appellant Mr.R.Murari has contended that the Company Law Board, a judicial authority set up for the purpose of adjudicating disputes between the shareholders on the grounds of oppression and mismanagement, has already seized up the matter and respondent also filed number of applications submitting to the jurisdiction of the Company Law Board to decide the issue and while so not disclosing filing of applications before Company Law Board, the respondent has filed an application under Section 9 of the Arbitration and Conciliation Act covering essentially matters in respect of which it had moved an application before the Company Law Board. It was further submitted that when the matter is pending adjudication before the Company Law Board, the application under Section 9 is glaringly an after-thought and the learned Judge ought to have seen the malafide conduct of the respondent, who started trail of correspondence only for the purpose of the application under Section 9 of the Arbitration and Conciliation Act. In so far as the maintainability of the appeal against the exparte interim injunction, the learned counsel for appellant has submitted that the interim order granting exparte interim injunction affect the vital and valuable rights of the appellants causing a serious prejudice to them and therefore the appeal is maintainable under Clause 15 of the Letters Patent.
9. The appeal is opposed by the respondent mainly on the ground that as against the exparte interim injunction the appeal is not maintainable. Learned counsel for respondent would submit that exparte interim injunction was granted only till 8.9.2011 and Order 39 Rule 3 has been complied with and the appellants, having entered appearance in O.A.No.679 of 2011, ought to have taken steps for vacating the exparte interim injunction before the single Judge and the appeal is not maintainable. The main objection of the learned counsel for respondent is that as against an exparte interim injunction, an appeal is not maintainable under Clause 15 of the Letters Patent appeal, as such an order cannot be said to be a judgment within the meaning of Clause 15 of the Letters Patent. In support of his contention, he placed reliance upon several decisions of the Supreme Court as well as the High Court.
18. In paragraph No.25 of the Petition, respondent has averred that respondent is entitled to an order of mandatory injunction protecting its rights under the Shareholders Agreement. The interim injunction sought for appears to be a mandatory injunction couched in the form of a prohibitory injunction. The relief under section 9 is intended only as a protective measure and under Section 9 of the Arbitration and Conciliation Act, the respondent cannot seek for a mandatory injunction. More so, an exparte mandatory injunction. By a careful reading of the reliefs, the reliefs sought for in the Petition under Section 9 of the Arbitration Act are exactly the issues raised in the Company Law Board. It is in these circumstances, the question whether the impugned exparte interim injunction affects the valuable rights of the appellants to maintain this appeal is to be considered.