TMI Blog2007 (5) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be granted in view of the provisions of the Specific Relief Act. Here again, we do not think that we should pronounce on that question since that again will be a question for the arbitrator to pronounce upon. Suffice it to say that the position is not clear enough for us to assume for the purpose of this interlocutory proceeding that the appellant is entitled to specifically enforce the agreement dated 14.3.1991 read in the light of the Power of Attorney dated 25.3.1991. Of course, this aspect will be again subject to the contention raised by the appellant-company that the agreement created in his favour was co-terminus with the mining lease itself. But, as we have stated, these are the aspects to be considered by the Arbitral Tribunal. We refrain from pronouncing on them at this stage. Prima facie, it appears that the general rules that governed the court while considering the grant of an interim injunction at the threshold are attracted even while dealing with an application u/s 9 of the Act. There is also the principle that when a power is conferred under a special statute and it is conferred on an ordinary court of the land, without laying down any special condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. New terms were negotiated between the parties and on 22.9.2001, the agreement was extended for a period of three years commencing from 14.3.2001. The term was to end with 31.3.2003. Again, on 3.9.2003, the term of the agreement was extended for a further period of three years commencing from 1.4.2003. Thereby, the period was to end with 31.3.2006. 5. The appellant sought a further extension of the term of the agency agreement. Apparently, the firm was not willing for an extension. Certain disputes thus arose and by letter dated 19.11.2005, the appellant-company sought resolution of the said disputes. The appellant- company followed this up by a letter dated 9.12.2005 invoking the arbitration clause in the agency agreement and nominating Mr. Sanjeev Jain as its arbitrator in terms of the arbitration agreement. 6. It is seen that the respondent firm, for reasons best known to itself, sought for and got a fresh registration on 24.12.2005 and a firm having the same name was again registered and assigned registration No. 595/2005. Prima facie, this was unwarranted and the excuse put forward was that the partners, some of whom were partners even originally, could not trace the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be granted. 8. The District Court, while entertaining the application had made an order on 8.3.2006 directing the parties to maintain the status quo. After hearing the parties, the District Court took the view that it would be just and appropriate to maintain the order of status quo until the disputes are referred to the Arbitral Tribunal and the Tribunal takes seisin of the dispute. Thus, the order of status quo originally granted was directed to continue until the Arbitral Tribunal was constituted to take up the disputes between the parties. Feeling aggrieved, the respondent firm --- there is a plea that the appeal was filed by the firm of 2005 and not by the firm of 1949 which we shall deal with --- filed an appeal before the High Court of Orissa. The High Court took the view that the District Court was in error in granting an order to maintain the status quo since prima facie the agreement between the parties was not a specifically enforceable one in terms of the Specific Relief Act and since the term of the agreement had expired it was not appropriate to grant an interim order as granted by the District Court. Thus, the High Court reversed the decision of the District Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like the one entered into between the parties by way of a raising contract, could not be specifically enforced as rightly held by the High Court. It was also pointed out that the respondent firm had lost confidence in the appellant-company and in such a situation, the appellant-company cannot claim to continue as an agent of the respondent firm since the creation or continuation of an agency arrangement depends on the confidence reposed by the principal on the agent. It was also pointed out that subsequent to the expiry of the term, a tripartite agreement had been entered into with a labour union and it contained a recognition that the period of the contract between the respondent firm and the appellant- company had come to an end. It could be seen therefrom that the appellant-company had taken over, directly, the liability in respect of the labourers who were being employed by the appellant-company during the subsistence of the raising contract. It was also submitted that the respondent firm had started mining operations on its own and the balance of convenience was not in favour of grant of any interim order as was done by the District Court. At best, the damages, if any, suffere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement between the parties was co-terminus with the mining leases and the respondent firm could not terminate the agreement so long as the mining leases in its favour continued to be in force. Nor do we think it proper to decide the sustainability of the argument on behalf of the respondent firm that it was mainly an agency agreement for a fixed term and on the expiry of the term, no right survives in the appellant-company unless of course the respondent firm agreed to an extension of the period. We leave that question open for decision by the Arbitral Tribunal. 13. Prima facie, it is seen that the mining lessee had entered into an agreement with the appellant-company for the purpose of raising the iron ore from the area covered by the mining lease. The term of the original agreement expired and this was followed by two extensions for three years each. Thereafter, the respondent firm had refused to extend the agreement and claims that it wants to do the mining itself. Prima facie, it is not possible to say that the High Court was wrong in thinking that it may be a case where an injunction could not be granted in view of the provisions of the Specific Relief Act. Here again, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on an ordinary court of the land, without laying down any special condition for exercise of that power, the general rules of procedure of that court would apply. The Act does not prima facie purport to keep out the provisions of the Specific Relief Act from consideration. No doubt, a view that exercise of power under Section 9 of the Act is not controlled by the Specific Relief Act has been taken by the Madhya Pradesh High Court. The power under Section 9 of the Act is not controlled by Order XVIII Rule 5 of the Code of Civil Procedure is a view taken by the High Court of Bombay. But, how far these decisions are correct, requires to be considered in an appropriate case. Suffice it to say that on the basis of the submissions made in this case, we are not inclined to answer that question finally. But, we may indicate that we are prima facie inclined to the view that exercise of power under Section 9 of the Act must be based on well recognized principles governing the grant of interim injunctions and other orders of interim protection or the appointment of a receiver. 16. It is seen that in spite of the parties naming their respective arbitrators, in terms of the arbitration agr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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