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M/s Arvind Constructions Co. Pvt. Ltd. Versus M/s Kalinga Mining Corporation

Civil Appeal No. 2707 of 2007 - Dated:- 17-5-2007 - TARUN CHATTERJEE AND P.K. BALASUBRAMANYAN JJ. JUDGMENT: P.K. BALASUBRAMANYAN, J. 1. Leave granted. 2. M/s Kalinga Mining Corporation, a partnership firm bearing registration No. 71/1949, came into existence on 10.12.1949. During the years from 1973 to 1980, the firm obtained three mining leases from the State Government. The partnership firm was reconstituted in the year 1980, taking in some additional partners, again in the year 1991 and yet a .....

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of 10 years fixed in the agency agreement expired. 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 f .....

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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 papers relating to the registration of the firm in the year 1949. Be that as it may, on receipt of the communication in that behalf from the appellant-company nominating an arbitrator, the firm in its turn named an arbitrator. In terms of the arbitration cla .....

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the parties. The said application is said to be pending. 7. The appellant-company also moved an application under Section 9 of the Act before the District Court, Cuttack seeking interim relief essentially to permit it to continue to carry on the mining operations and to restrain the respondent firm from interfering with it. According to the appellant, the agreement between the parties was co-terminus with the subsistence of the mining lease granted by the State in favour of the respondent firm a .....

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on, the balance of convenience was in favour of the grant of an interim order as sought for by the appellant. The respondent firm resisted the application, inter alia, contending that the agreement between the parties was essentially an agency agreement. Such an agreement could not be specifically enforced. On the expiry of the term, the appellant- company had no subsisting right or status to carry on mining and in that situation the injunction sought for could not be granted. It was also conten .....

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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 m .....

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has filed this appeal. It is contended on its behalf that the appeal filed before the High Court was not by the firm bearing registration No. 71/1949 with which the appellant-company had the agreement. The arbitration clause, which the appellant-company had invoked, was in relation to that agreement and hence the appeal before the High Court, at the instance of the firm bearing registration No. 595/2005, was not maintainable. It was further contended that since the agreement relied upon by the a .....

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ed that the powers under Section 9 of the Act were independent of any restrictions placed by the Specific Relief Act and viewed in that manner, nothing stood in the way of the appellant-company being granted an order of injunction or at least an order to maintain status quo until the Arbitral Tribunal decided the dispute. 10. On behalf of the respondent firm, it was contended that it was only a case of reconstitution of the 1949 firm. It was a mistake to have the firm registered again in the yea .....

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the High Court was not filed by the firm which was a party to the contract with the appellant. On merits, it was submitted that the agreement was for a specific term, there was no irrevocability in the agency agreement and an agreement 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 .....

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efrom 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, suffered by the appellant-company was determinable in terms of money a .....

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no prima facie case for an injunction as sought for. 11. The objection that the appeal filed before the High Court was not competent need not detain us much. It was the appellant who filed the application under Section 9 of the Act impleading the firm and its partners. The said firm represented by a partner, who even admittedly was a partner of the firm as constituted in the year 1949 and was also a party to the agreement with the appellant-company itself, had filed the appeal before the High Co .....

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ectification of the register realizing the mistake that was made in having the same firm registered all over again, and that the said matter is pending. Considering the circumstances, we are of the view that the argument that the appeal before the High Court was not competent, it not having been filed by the firm with which the appellant- company had the contract, is unsustainable. The said contention is therefore overruled. 12. The effect of the agreement dated 14.3.1991 and the Power of Attorn .....

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r 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 appell .....

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fic 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 .....

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eave the parties to have their disputes resolved in terms of the arbitration agreement between the parties. 15. The argument that the power under Section 9 of the Act is independent of the Specific Relief Act or that the restrictions placed by the Specific Relief Act cannot control the exercise of power under Section 9 of the Act cannot prima facie be accepted. The reliance placed on Firm Ashok Traders & Anr. Vs. Gurumukh Das Saluja & Ors. [(2004) 3 S.C.C. 155] in that behalf does not al .....

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ve the same power for making orders as it has for the purpose and in relation to any proceedings before it. 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 under Section 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 c .....

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gh 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 .....

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