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TMI Blog2009 (12) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the suit land were under the possession of a third party, who has a small marble godown under the appellants, but is willing to vacate the same and handover the possession thereof to the appellants. The respondent has taken a decision to develop the suit land into a multi-purpose complex by way of joint venture agreement as aforesaid. In this joint venture, the share of the appellants would be 45% of the constructed area and the sole obligation and responsibility of the appellants would be to give vacant possession of the suit land to the respondent for the purpose of construction thereon. A concluded contract, thus, came into existence between the respondent and the present appellants. On 15.6.2006, the respondent, on the one hand, as developer, and one Mr P.D. Deorah, the common director of the two appellant-companies, as owner, executed an agreement, in writing, in the form of term sheet, whereby and where under the parties had finalised the broad terms and conditions of the joint venture for construction of multipurpose complex on the suit land. By means of four cheques, applicant-respondent, in discharge of its obligation under the term sheet, dated 15.6.2006, paid rupees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 15.6.2006, the respondent has performed all its obligations and is ready and willing to perform its further obligations under the contract except performance of those terms and conditions, which have been waived by the appellants. However, while the respondent was taking necessary steps for commencing the work and had, in the meanwhile, incurred even additional expenditure of rupees twenty-seven lakh for preparation of sanction plan, etc., the respondent's men and agents, deployed on the suit land, found that some unknown men and agents of a third party were visiting the suit land and were enquiring about the project. On 21.2.2009, some men, along with engineer, visited the suit land and requested that they be allowed to lake measurement of the land. On being confronted by the respondent, the said men informed that the appellants were taking steps to sell the suit land by way of an outright sale to a third party. Further enquiry, in this regard, revealed that the said men and agents of a third party had been authorised by the appellants to take measurement of the said plot. The respondent's men and agents, then, lodged a complaint at Dispur Police Station. (c) Under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al determination of any contentious issue; rather, they said order, according to Mr. Shyam, has been passed by the learned court below ex-debito justitiae only to prevent the application, made by the respondent, from becoming redundant and frustrated. 6. In the present case, since the impugned order is an order, which has been passed ex-parte and without hearing the present appellants, this order, according to Mr. Shyam, cannot be regarded as an order passed as an interim measure within the meaning of Section 9 of the Act of 1996. Such an order, further contends Mr. Shyam, is not an appealable order. In support of his submissions, Mr. Shyam refers to, and relies upon. Symphony Services Corporation (India) (P.) Ltd. v. Sudip Bhattacharjee 2009 (1) R.A.J. 609 (Kar.). 7. Controverting the submissions made, on behalf of the applicant-respondent, Mr. K.N. Choudhury, learned senior Counsel, appearing for the, opposite party-appellants, points out that Section 9 specifically mentions interim injunction as one of the interim measures of protection and, hence, an interim order of injunction, whether passed ex parte or otherwise, would amount to an interim measure within the meaning of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned trial court below has directed, it becomes abundantly clear that the learned court below has, for protection of the suit property, directed that the appellants herein shall not create any third party interest over the suit property and maintain status quo of the suit land until further order, There can be no doubt that the impugned directions amount to granting of injunction. Whether such an order, because of the fact that it has been passed ex parte, would fall within the ambit of Section 9 and be regarded as an interim measure within the meaning of Section 9 and/or whether such directions, as have been given by the interim order, would be amenable to the appellate provisions aimed in Section 37(1)(a) of the 1996 Act, are questions, which this Court is, now, required to determine. 12. While considering the rival submissions made as regards the maintainability of this appeal, what needs to be, first, determined is the question whether an application, seeking interim measure under Section 9, gives rise to a 'proceeding' within the meaning of Section 141 of the Code. The question, therefore, is as to what a 'proceeding' means? 13. The question, posed ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; "include original matters in the nature of suits", it gave rise to a fresh spate of conflicting views from the various High Courts on the meaning of the words, "original matters", occurring in Thakur Prasad (supra). For instance, while there was one set of decisions taking the view that an application under Order IX, Rules 9 and 13, same as applications made under Order XXI, Rules 89, 90, 91, 97 and 100, are original matters, the other set of views was that these are not original proceedings, for, the applications, made under Order IX, Rules 9 and 13, trace their origin to suits and, similarly, the applications, made under Order XXI, Rules 89, 90, 91, 97, 99 and 100, owe their birth to execution proceedings. The reason for the controversy, which so erupted, was that the word, "original" was capable of, at least, two different shades of meanings. In its primary sense, the "original matters" would mean those matters, which are capable of coming into existence on its own and not as derivative to some other suit or proceeding; for example, a proceeding for probate or guardianship comes into existence on its own and these proceedings do not owe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Order XXI, Rule 90 of the Code, for setting aside the sale. Later, however, the guardian ad litem came to a settlement with the decree-holder and the auction-purchaser. According to the terms of settlement, the guardian ad litem was to give up his contention regarding the invalidity of the sale and withdraw the petition made for setting aside the sale and also give up possession of the properties sold to the auction purchaser and, in return thereof, the decree-holder and the auction-purchaser agreed to give up their claim for costs of the petition. In pursuance of this agreement, the petition was withdrawn and dismissed by order made on 12th August, 1932. After attaining majority, Dokku Bhushayya filed a suit, in the year 1944, to set aside the order of 12th August, 1932, and for a re-hearing of the petition, which was dismissed by the order passed on that date. The suit was decreed by the trial court, but on appeal, the decision of the trial court was reversed by the High Court at Madras and the suit was ordered to be dismissed. It was in these circumstances that Dokku Bhushayya came, in appeal, before the Supreme Court. The question, which, thus, came up before the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings' within the meaning of Section 141, for, application for temporary injunction can neither be treated as a 'proceeding' in the nature of an original suit nor can it be treated as a proceeding, which is independent of the existence of the suit or the appeal. No wonder, therefore, that in Shiv Shakti Coop. Housing v. Swaraj Developers (2003) 6 SCC 659, while summarizing the effect of the recent amendments to the Code, the Apex Court observed, thus: 32. A plain reading of Section 115 as it stands makes it clear that the stress is on the question whether the order in favour of the party applying for revision would have given finality to suit or other proceeding. If the answer is "yes" then the revision is maintainable. But on the contrary, if the answer is 'no' then the revision is not maintainable. Therefore, if the impugned order is interim in nature or does not finally decide the lis, the revision will not be maintainable. The legislative intent is crystal clear. Those orders, which are interim in nature, cannot be the subject-matter of revision under Section 115. 23. The decision, rendered in Shiv Shakti Co-op. Housing (supra), makes it abun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applies also to a proceeding which is not an original proceeding. 25. It may be carefully noted that the decision in Earn Chandra Agarwal (supra), was rendered without, of course, referring to Thakur Prasad (supra) and Dokku Bhushayya (supra). Be that as it may, what the Supreme Court held, in Ram Chandra Agarwal (supra), was that a proceeding, in order to fall within the meaning of the word 'proceeding' in Section 141, need not necessarily be an original proceeding. 26. What, however, needs to be borne in mind is that though in the light of the decision in Ram Chandra Agarwal (supra), a 'proceeding', for the purpose of being a proceeding under Section 141, may not necessarily be an original proceeding, such as, an application for probate, yet a 'proceeding', in order to be a proceeding within the meaning of Section 141, has to be nevertheless a 'proceeding', which is not a stage of an already pending proceeding and is also not dependent on the existence or survival of another proceeding. A proceeding under Order IX of the Code falls within the meaning of the word 'proceeding' in this limited sense. No wonder, therefore, that the Explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made under Order IX, Rule 13, seeking to get set aside an ex parte decree, is a 'proceeding', within the meaning of the expression 'proceeding', occurring in Section 141. Considered in this light, a proceeding, which starts with the filing of an application for restoration or readmission of appeal under Order XLI, Rule 19, is also a 'proceeding', for, it is not really an extension of suit or appeal, and though an offshoot therefrom, it is an independent proceeding capable of standing on its own. 28. In the backdrop of the position of law as discussed above, when I revert to the case at hand, what attracts the eyes, most prominently, is that when an application is made under Section 9 of the Act of 1996 to a civil court, such an application gives rise to a 'proceeding', which is original in nature, such a 'proceeding' and is not dependent upon the pendency of any suit or appeal. In fact, Section 9 makes it clear that an application, seeking interim measure, as provided in Section 9, may be made even before any arbitral proceeding has commenced. Thus, even before commencement of an arbitral proceeding, an application, under Section 9, may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Section 9 of the 1996 Act, gives rise to a "proceeding", it is the procedural part of the Code, which would be applicable to such a 'proceeding'. Logically, therefore, the provisions, embodied in Order XXXIX, in respect of granting of injunction, would also be applicable to, and available for, disposal of an application under Section 9. 32. Ordinarily, no order, adverse to the interest of a party, can be passed without giving an opportunity to such a party to have his say in the matter. Consequently, had no provisions for making ex parte order of injunction been made in Order XXXIX, Rule 3 of the Code, an order of injunction could not have been passed, under the Code, without giving any opportunity of showing cause, in that regard, to the party against whom an order of injunction is sought for. Had no provisions been specifically made available in the Code, in this regard, one could have, perhaps, contended that the power to grant ex parte order of injunction is derived by a court under the principle that every court has the power to pass an order, which it must pass so as to ensure that the application, made before it, does not become infructuous merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34. In short, an express grant of statutory powers carries with it, by necessary implication, the authority to use all reasonable means to make such grant effective. Thus, in ITO v. M.K. Mohammad Kunhi AIR 1969 SC 430, the Apex Court held that the Income Tax Appellate tribunal has implied powers to grant stay, although no such power has been expressly granted to it by the Income Tax Act. See also Union of India v. Paras Laminates (P.) Ltd. (1990)4 SCC 453, RBI v. Peerless General Finance and Investment Co. Ltd. (1996) 1 SCC 642, CEO & Vice-Chairman, Gujarat Maritime Board v. Haji Daud Haji Harun Abu (1996) 11 SCC 23, J.K. Synthetics Ltd. v. CCE (1996) 6 SCC 92, State of Karnataka v. Vishwabharathi House Building Coop. Society (2003) 2 SCC 412, etc. In Savitri v. Govind Singh Rawat (1985) 4 SCC (Crl.) 556, the Supreme Court was required to deal with an interim order of maintenance, passed under Section 125, Cr.PC, when no specific provision, enabling a magistrate to grant interim maintenance had been provided. It is at a later stage that specific provisions have been made under Section 125, Cr.PC for interim maintenance. However, even when no specific provision had existed for grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a situation may arise, where the very objective of granting of injunction would be defeated by delay if the order of injunction, proposed to be passed, is not passed without giving notice to the party, against whom the order is proposed to be passed, Parliament has made specific provisions, in this regard, in Order XXXIX, Rule 3. 37. In the backdrop of what has been pointed out above, when Order XXXIX, Rule 3 is read, it become clear that the Parliament has provided that no court shall, ordinarily, pass an order of injunction without giving notice to the party, against whom the order is proposed to be made, except where it appears to the court that the object of granting injunction would be defeated by delay. The proviso to Rule 3 of Order XXXIX further shows that when a court is required to make an order of injunction, without giving notice of the application to the opposite party, the court shall, amongst others, record reasons for forming its opinion that the object of granting injunction would be defeated by delay. 38. What further follows from the above discussion is that since an application under Section 9 of the 1996 Act gives rise to a 'proceeding', within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opposite party, or the party, against whom injunction is sought for, would not amount to an interim measure within the meaning of Section 9. 41. It has been also contended by Mr. Shyam that an order of injunction, granted under Section 9, without giving notice to the party against whom the injunction is sought for, cannot be regarded as an appealable order under Section 37(1)(a) of the Act of 1996. In other words, what Mr. Shyam contends is that an order of injunction, passed ex parte, under Order XXXIX, Rule 3, is not an appealable order, because no specific provision has been made for appeal, under Section 37(1)(a), against an ex parte order of injunction granted under Section 9. Though it is not specifically mentioned, Mr. Shyam appears to have been referring to a decision of the Division Bench of this Court, delivered on 29.7.1998, in MA(F)2011/98 (Union of India and ORs.v. Subhash Mohan Dev), wherein it has been held that an order, passed under Rule 3 of order XXXIX is not an appealable order. To set at rest, the question as to whether an order of injunction, passed ex parte under Order XXXIX, Rule 3, is or is not an appealable order, a reference needs to be made to a dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been removed by the introduction of Rule 3, which provides that the court after recording reasons for its satisfaction that the object of granting injunction would be defeated by delay, etc., may pass an order of ex parte ad-interim injunction under Rules 1 and 2 of Order 39. It does not stand to scrutiny that an ad-interim order devoid of reasons, rendered in violation of the well-known principles that a judicial order must contain reasons, and in violation of the mandatory provision of Rule 3 can escape the jurisdiction of the appellate court, but the same order can be revised by the very same court. 42. From the above observations, made in Akmal Ali (supra), what can be gathered is that the Full Bench of this Court has taken the view that the Parliament, being fully aware of the fact that an interim order of injunction is invariably required to be passed ex parte, has made provisions for appeal against such ex parte orders. In this regard, the Full Bench points out that Order 43, Rule 1(r) speaks that an appeal shall lie from a order under Rule 1, Rule 2(A), Rule 4 and Rule 10 of Order XXXIX and this necessarily implies that an ex parte temporary injunction, whether provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on final adjudication of the application made under Section 9, Mr. Shyam relies on Symphony Services Corporation (India) (P.) Ltd. (supra). 45. For the reasons, which I have already assigned above, I respectfully express my inability to agree with the observations made, and the law laid down, in Symphony Services Corporation (India) (P.) Ltd. (supra), wherein the basis of taking the view, which Mr. Shyam seeks to advance, is that when Section 9 uses the word 'granting', the use of the word 'granting' would necessarily mean final adjudication of the application made under Section 9 of the Act of 1996. The relevant observations, made in this regard, at para 12, read as under: 12. Section 37 of the Act would related to the appealable orders. Indeed, granting or refusing to grant any interim measure under Section 9 of the Act is an appealable order. The nomenclature or the usage of the word 'granting' under Section 9 of the Act would necessarily mean the final adjudication of the application under Section 9 of the Act. 46. In the light of the decision of the Full Bench, in Akmal Ali (supra), coupled with the other reasons, which I have assigned above, I a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oudhury, that the respondent had been advised to go for arbitration for resolution of their dispute and, that is why, the respondent had made the application under Section 9. Mr. Choudhury submits that the averments, made in the application under Section 9, to the effect that the applicant-respondent had been advised to go for arbitration, is not reflective of an intention to go for arbitration and that the respondent, on the basis of such a statement alone, cannot be said to have made out a case for invoking the jurisdiction of the court under Section 9. 51. While considering the submissions made above, it needs to be pointed out that an application under Section 9 can be made before or during an arbitral proceeding or at any time after making the arbitral award, but before enforcement of the award. If, while making an application under Section 9, a person makes a statement that he is making the application under Section 9 following the advice given to him that he should go for arbitral proceeding, it would, ordinarily, be, in the absence of anything showing to the contrary, an indication of the fact that the applicant, acting upon the advice, has opted to invoke the arbitration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, there has to be manifest intention on the part of the applicant to take recourse to the arbitral proceedings if, at the time when the application under Section 9 is filed, the proceedings have not commenced under Section 21 of the 1996 Act. In order to give full effect to the words "before or during arbitral proceedings" occurring in Section 9, it would not be necessary that a notice invoking the arbitration clause must be issued to the opposite party before an application under Section 9 can be filed. The issuance of a notice may, in a given case, be sufficient to establish the manifest intention to have the dispute referred to an arbitral tribunal. But a situation may so demand that a party may choose to apply under Section 9 for an interim measure even before issuing a notice contemplated by Section 21 of the said Act. If an application is so made, the court will first have to be satisfied that there exists a valid arbitration agreement and the applicant intends to take the dispute to arbitration. Once it is so satisfied, the court will have the jurisdiction to pass orders under Section 9 giving such interim protection as the facts and circumstances warrant. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eworthy that referring to the provisions of Clause (e) of Section 41 of the Specific Relief Act, 1963, Mr. Choudhury submits that the provisions, contained in Clause (e), make the legislative intent clear that no injunction can be granted by a court to prevent breach of such a contract, the performance of which would not be specifically enforced. In the present case, contends Mr. Choudhury, the agreement, which the parties had entered into, was not an agreement for transfer of 'immovable property'. In such circumstances, further contends Mr. Choudhury, specific performance of the contract, in question, is not possible inasmuch as whatever loss may be sustained by the respondent for the breach, if any, of the contract, in question, such loss or damage can be very well compensated in terms of money. 55. Reacting to the submissions, so made, on behalf of the respondent, Mr. Shyam, learned Counsel, submits that as far as the respondent is concerned, it has always been ready and willing to perform its part of the contract and it had never deviated from the contract This apart, Mr. Shyam submits that the project, in question, which the respondent had undertaken, pursuant to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;immovable property', but also a contract to transfer 'movable property' can be specifically enforced subject to, of course, such conditions and limitations as may have been prescribed under the Specific Relief Act. The distinction between the two, namely, contract for transfer of 'immovable property' and the contract for transfer of 'movable property' vis-a-vis specific performance of these two contracts is that while, in the case of a contract to transfer of 'immovable property', the court is statutorily bound to raise a presumption that such a contract cannot be adequately relieved by compensation in money, no such presumption can be raised in respect of a contract to transfer 'movable property'. 60. The limited question, however, which I am, at this stage, concerned with, is this: Whether, in the face of the terms and conditions of the agreement, entered into between the parties concerned, there was a contract to transfer immovable property or not. In other words, the question is whether the covenant, in the agreement, that upon completion of the construction, the respondent would own as much as 55% of share, in the constructed ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mortgager acquires, interest in the property, the owner's interest in the property gets reduced. Similar is the situation with a development agreement. In a development agreement of an immovable property, the owner's right, title and interest, depending upon the terms of contract, stand reduced to the extent that the developer acquires, rights, title and interest, in such property. 63. In the present case, according to the contract, which the parties have entered into, it is clear that on completion of the project, the respondent were to become owner of 55% of the constructed area. However, which part of the constructed area would belong to the respondent has not been ascertained. The fact of the matter remains that there is nothing in the agreement to show that the appellants' title to the suit land would still remain with them, when the respondent would become owner of half of the multipurpose complex, which may be raised on the suit land. Unless the agreement shows that the developer, while becoming the owner of the half of the building, which may be raised on a plot of land, cannot have any right on the land, the logical comprehension of such transfer would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest in the constructed property in favour of the respondent. Such a contract, as in the present case, cannot but be regarded as a contract to transfer immovable property and, breach of such a contract would, ordinarily, be specifically enforceable inasmuch as Section 10 of the Specific Relief Act, makes it clear that unless and until the contrary is proved, the court shall presume that the breach of contract to transfer immovable property cannot be adequately relieved by compensation in money. 65. The appellants, in the present case, have not been able to show, at this stage, as to how, if the agreement, entered into between the parties, amounts to transfer of immovable property, the breach of such contract can be relieved by way of compensation in money. This apart, Mr. Shyam, learned Counsel, has considerable force in his submission that in a project of the kind, as in the present case, the goodwill of the developer remains at stake. If the contract fails, the developer would lose his goodwill. In such circumstances, it is difficult to comprehend, unless it can be shown otherwise, that the breach of a contract of the present nature can be adequately compensated in terms of mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding and, consequently, no injunction, as granted by the impugned order, could have been ordered. 67. The submissions, made by Mr. Choudhury, as noted above, cannot detain us inasmuch as the Apex Court, in Olympus Superstructures (P) Ltd. v. Meena Vijay Khetan and ORs.(1999) 5 SCC 651, has taken the view that the right to specific performance deals with contractual rights and it is certainly open to the parties to agree, with a view to shorten litigation in regular courts, to refer issues, relating to specific performance of their contract, to arbitration. There is no prohibition, in the Specific Relief Act, points out the Supreme Court, in Olympus Superstructures (P.) Ltd. (supra), that the issues, as regards specific performance of contract relating to immovable property, cannot be referred to arbitration nor is there any such prohibition contained in the Act of 1996. The Apex Court has further pointed out, in Olympus Superstructures (P.) Ltd. (supra), that unlike English Arbitration Act, 1950, or Section 48(5)(b) of the English Arbitration Act, 1996, which contain prohibition relating to specific performance of contract concerning immovable property, the Act of 1996, in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, to the GMDA. In this regard, Mr. Choudhury submits that the appellants were compelled to submit a revised plan to the GMDA and, thus, it took considerable time and as a result thereof, delay occurred. Mr. Choudhury also submits that the plan was finally approved, on 5.12.2007, by the GMDA, but it was clue to delay tactics, adopted by the respondent, that the requisite steps, in tune with the term sheet, could not be taken. Due to delay in the project, the appellants, points Mr. Choudhury, are incurring huge financial loss. 70. It is also the case of the appellants, as presented by Mr. Choudhury, that though at one point of time, it was agreed by the parties that no MoU need be signed, the respondents held the view that the MoU was required to be signed and the MoU was accordingly signed on 4.3.2008. Mr. Choudhuiy contends that in terms of Clause 3.5 of the MoU, time was the essence of the contract. 71. By a facsimile message, dated 27.1.2008, the appellants, Mr. Choudhury submits, demanded, in terms of the MoU, rupees twenty-one lakh from the respondent informing the respondent that the occupants of the two shops, within the suit land, had agreed to vacate the occupied portion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for frontage of the building, which the respondent wants to construct, and also for having appropriate access to such a building. At any rate, points out Mr. Choudhury, the contract, which was, originally, entered into by the parties concerned has become unworkable and if it has to be worked out anew, it would be a new contract. The original contract, therefore, insists Mr. Choudhury, has become frustrated and cannot be specifically enforced and when the contract, in question, cannot be specifically enforced, the learned court below ought not to have granted injunction in favour of the respondent. In support of his submission that the court should, in the facts and circumstances of the present case, take into account the developments, which have taken place subsequent to the filing of the appeal, Mr. Choudhury refers to, and relies upon, the case of Jai Mangal Oraon v. Smt. Mira Nayak and ORs.(2000) 5 SCC 141. 74. Responding to the submissions, so made, on behalf of the appellants, Mr. Shyam contends that the submissions, made, on behalf of the appellants, that the project was a time bound project and that it was due to deliberate inaction, on the part of the respondent, that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now, become, due to subsequent development, impossible to be specifically performed. If the contract was not specifically enforceable, the question of granting any interim injunction, as has been done, in the present case, by the impugned order, cannot arise. 77. In the light of what has been pointed out above, one cannot ignore the fact that there is no dispute before this Court that the contract, entered into between the parties, had envisaged different steps to be taken at different stages. It is also not in dispute that a draft agreement had been agreed to be signed by the parties before the construction commences. It is the respondent's case that the construction could not be commenced due to, amongst others, the fact that the appellants had not signed the draft agreement. The appellants, on the other hand, contend that they could not sign the agreement inasmuch as the draft agreement contained such terms and conditions, which were not consistent with the terms and conditions, which the parties had agreed to in the term sheet, MoU and the approved plan. 78. What is, now, curious to note is that it is not contended, on behalf of the respondent, that the draft agreement, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Specific Relief Act. Mr. Choudhury correctly points out that the Apex Court has clearly held, in Adhunik Steels Ltd. (supra), that under Section 28 of the Act of 1996, even an arbitral tribunal has to decide a dispute, submitted to it, in accordance with the provisions of substantive laws, for the time being in force, in India, if it is not international commercial arbitration. As a proposition of law, submits Mr. Choudhury, there can be no dispute and there is, in fact, no dispute, in this appeal, that granting of injunction, even in the realm of Section 9 of the Act of 1996, is a relief, which will be governed by substantive laws, which are in force in India and such substantive laws would obviously include the Specific Relief Act and the Code of Civil Procedure. 80. I may point out that in Adhunik Steels Ltd. (supra), it was contended, on behalf of the appellant, Adhunik Steels Ltd., that Section 9 of the Act of 1996 stood independent of Section 94 and Order XXXIX of the Code, which deal with granting of injunction, and further that exercise of power under Section 9 of the Act of 1996 is also not controlled by anything contained in the Specific Relief Act. As against this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief, by way of injunction, is, in general, governed by the Specific Relief Act, and Section 9 of the Act of 1996, which provides for interim injunction, the relevant provisions of the Specific Relief Act, cannot be kept out of consideration, for, grant of interim injunction, under Section 9, has to be necessarily based on the principles governing grant of injunction under the relevant provisions of the Specific Relief Act, and the law, in general, having a bearing on the same. Thus, the view, taken in Nepa Ltd. (supra), has not been agreed to and there can, therefore, be no escape from the conclusion that the provisions of the Specific Relief Act, and other substantive laws, such as, the law of contract, in a given case, cannot be said to be outside the purview of Section 9 if, in a given case, the court, under Section 9 of Act of 1996, is required to take a decision on the question of granting of interim injunction. The relevant observations, which appear at para 17, read as under: 17. In Nepa Ltd. v. Manoj Kumar Agrawal a learned Judge of the Madhya Pradesh High Court has suggested that when moved under Section 9 of the Act for interim protection, the provisions of the Specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds, cost of sanction of plans this is addition to the Security Deposit. The payment of the Security Deposit shall be in the following manner (1) On signing of the term sheet: 21.00 lacs. (2) On signing of the MOU, subject to obtaining of sanction of plans submitted by the owners before the competent authority and on approval of the Draft Development Agreement ₹ 21.00 lakh. (3) On removal/vacation of Shops on Zoo Road, which is located outside the said property: ₹ 21.00 lakh. (4) On removal/Vacation of Marble Godown and other occupiers in the said property: ₹ 21.00 lakh. (5) On signing of approved Development Agreement/Power of Attorney to be executed in favour of Developer for causing construction/sale/marketing: ₹ 116.00 lakh. (emphasis added) 84. From a close reading of Clause 3.8, it becomes, amongst others, clear that, on signing of the term sheet, the appellants were to receive ₹ 21 lakh and, on signing of MoU, subject to obtaining of sanction of plans from the GMDA, and on approval of the draft development agreement, the appellants were to receive another sum of ₹ 2.1 lakh from the respondent. This apart, on removal of the marb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f, two contracts, firstly, the principal Act agreed to be done or not be done, and embedded, in this principal contract, is the collateral contract of contingency. Sections 32, 33, 34 are various contingencies contemplated in the Contract Act. 91. So far as the performance of contract is concerned, the courts can direct specific performance only in a concluded contract. The principal contract, in a contingent contract, cannot be specifically performed unless the contingency arises and, therefore, it can be said that till the contingent condition is fulfilled, the contract is not a concluded contract. 92. What surfaces from the above discussion is that the contract, which the parties have entered into, is a 'contingent contract', which is inherently determinable in nature. When a contract is determinable in its nature. Section 14(c) of the Specific Relief Act makes it clear that such a contract cannot be specifically enforced. Obviously, therefore, until the time the condition of removal of the shops, at Zoo Road, is fulfilled, the question of specific performance of the contract, which the parties have entered into, does not arise at all. Viewed in this light, it becomes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not acceptable to them inasmuch as it contains altered and added new clauses. The appellants have also made it clear that it has no objection to the signing of the draft development agreement, dated 15.6.2006, inasmuch as the same is more or less in conformity with the MoU and the approved plan submitted by the GMDA. What is, however, of utmost importance to note is that in this letter, the appellants have stated that if the above offer is not acceptable to the respondent, then, they can mutually terminate the contract without prejudice to the respective rights of the parties concerned to seek appropriate relief. 95. In the letter, dated 15.4.2009, the appellants have further indicated that as regards the removal of the shops, located at Zoo Road, since the said shops fall under someone else's land, the appellants cannot remove them and, at best, such stipulation can be mutually waived by both the parties and, in consequence thereof, the respondent would not be liable to pay the sum of ₹ 21 lakh, which was to be paid to the appellants on their getting the shops, on the Zoo Road, vacated. 96. It is, now, of paramount importance to note that in response to the letter, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and based on that the entire project was worked out. 2. So far as we are concerned where are we at fault. We have complied with all our obligations and now it is quite clear that you are not in a position to have the shops vacated and this by itself shows that you were never able to fulfil your obligations. 3. However, without prejudice to what has been stated, we are prepared to proceed on the terms sheet/agreement but then the ratio has to be renegotiated that is to say we will have 75% and you will be entitled to 25% because of your inability to fulfil your obligations and also because of the fact that the project will not fetch the value we had anticipated. 4. However, you can be assured we would like to settle the matter amicably taking into account all the factors so that an amicable settlement is arrived at. This is without prejudice to our other rights and contentions. 98. From what have been stated in its two letters, dated 5.6.2009, by the respondent, it clearly transpires that the respondent has not disputed the fact that the draft development agreement, which it has offered to the appellants, is not in tune with the term sheet and the MoU. This apart, the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding it, is brought diligently to the notice of the tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy. Equity justifies bending the rules of procedure, where no specific provision or fair play is violated, with a view to promote substantial justice-subject, of course, to the absence of other disentitling factors or just circumstances. Nor can we contemplate any limitation on this power to take note of updated facts to confine it to the trial court. If the litigation pends, the power exists, absent other special circumstances repelling resort to that course in law or justice. Rulings on this point are legion, even as situations for applications of this equitable rule are myriad. We affirm the proposition that for making the right or remedy claimed by the party just and meaningful as also legally and factually in accord with the current realities, the court can, and in many cases must, take cautious cognisance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed. On both occasions the High Court, in revision, correctly took this view. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanges. If the court finds that the judgment of the court cannot be carried into effect because of change of circumstances of the court takes notice of the same. If the court finds that the matter is no longer in controversy the court also takes notice of such event. If the property which is the subject-matter of suit is no longer available the court will take notice of such event. The court takes notice of subsequent events to shorten litigations, to preserve rights of both the parties and to subserve the ends of justice. Judged by these principles it is manifest that in the present case suits are pending. On the one hand the appellant has challenged the decree obtained by Ashar and others as also warrant of execution. On the other hand, the suit instituted by Ashar and others against, inter alia, the appellant in 1965 for possession is pending. This Court cannot say with exactitude that any final decision has been reached on the respective and rival rights and claims of the appellant and the respondent. It is, therefore, neither desirable nor practicable to take notice of any fact on the rival versions of the parties as to subsequent events. 101. In fact, as late as in 2000, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tands frustrated. For the fact that the appellants have not got the said shops removed, they may, at best, subject to what the arbitrator finds, be liable for payment of damages. It is, for the first time, at a later stage of this appeal, contended by the respondent that the shops, at Zoo Road, are under the control of the appellants. In fact, in the application made under Section 9, while the respondent specifically averred that the marbal godown, located on the suit land, was under the control of the present appellants, the respondent did not even faintly indicate that the shops, at Zoo Road, are under the control of the present appellants. To a pointed query, however, made by this Court if there is any material to show including the terms sheet that the shops, at Zoo Road, are under the control of the appellants, Mr. Shyam could not draw attention of this Court to any such material. The submission, made by the respondent, that the shops, at Zoo Road, had been under the control of the appellants, is, thus, wholly without substance. 104. I have already pointed out above, that a contract, such as, the present one, which is determinable in nature, is not, in the light of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be given for any remote and indirect loss or damage sustained by reason of the breach. 109. When an obligation, resembling those created by contract, has been incurred and has not been discharged, any person, suffered by the failure to discharge it, is, according to Section 73, entitled to receive the same compensation from the party in default as if such person had contracted to discharge it and had broken his contract. 110. The Explanation to Section 73 makes it clear that in estimating the loss or damage arising from a breach of contract, the means, which existed of remedying the inconvenience caused by the non-performance of the contract, must be taken into account. 111. A contract regulates the rights and obligations of the contracting parties. A party to a contract, therefore, cannot claim any right, which, otherwise, is not recognized by the Contract Act. Since the Contract Act deals with various rights and liabilities of the contracting parties, it also provides for the remedies available to a party suffering from breach of a contract. As already indicated, Section 73 of the Contract Act makes it clear that the only remedy, for breach of contract, available, under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equate relief; 113. The Clauses (b) and (c) of Sub-section (3) of Section 38, quoted above, contain same principles as are mentioned in Clauses (a) and (b) of Section 10, the reason being equity or evenhandedness. An act or omission may be absolutely legal, yet may appear inequitable. For instance, if, in the light of Section 73 of the Contract Act, an offender of a contract were willing to pay damages to the aggrieved, but the loss, which is likely to be suffered by the aggrieved, is such that compensation, in money, would not have afforded adequate relief, the Contract Act would have been no answer, for, performance of the contract is the only answer to such a problem. This is where the specific performance of contract comes in and the offender may be directed to perform the contract. As the relief is equitable, it is but natural, that the conduct of the aggrieved also has to be equitable. 114. Having referred to the circumstances mentioned in Section 10 of the Specific Relief Act, whereunder specific performance of contract can be ordered, it also becomes important to dwell upon those circumstances, whereunder a contract, even if offended, cannot be specifically enforced. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. 115. A cautious reading of Section 14 of the Specific Relief Act, will show that even if the contracts, mentioned in Clause 1(a), (b), (c) and (d) of Sub-section (1), deal with the circumstances, where under contracts cannot be enforced, yet these circumstances are not exhaustive and these are regulated by the various other circumstances mentioned in these provisos. The various exigencies, mentioned in these provisions, have been contemplated keeping in mind the Clauses (a) and (b) to Section 10. Thus, the safer way is to bear in mind the principles granting specific performance of contract. If the principles, mentioned in Clauses (a) and (b) of Section 10, are not attracted in a given case, it can be safely concluded that the specific performance has to be denied. Clauses (a), (b), (c) and (d) of Sub-section (1) of Section 14 of the Specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot enforceable, has been made enforceable in disguise, which is strictly against the equitable principles. 120. It is in the backdrop of what has been discussed above that the provisions, with regard to injunction to perform negative agreement, as embodied in Section 42, need to be, now, considered. Section 42 reads as follows: 42. Notwithstanding anything contained in Clause (e) of Section 41, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement: Provided that the plaintiff has not failed to perform the contract so far as it is binding on him. 121. The question, now, would be as to what are the principles, based on which we can exercise the discretion to grant injunction to enforce a negative covenant. We must remember that Section 42 is not a licence to do something, which is already prohibited by Section 41. But as the law is all about exigencies and circumstances, Section 42 has to be read as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to still consider whether it should, in the exercise of its discretion, grant injunction, or not, to enforce a negative stipulation in a contract, when it cannot force specific performance of the positive stipulation of the contract. The question, therefore, is: how this discretion has to be exercised? 125. The principle of enforcing a negative covenant, in a contract, which is, otherwise, not specifically enforceable, developed more rapidly and robustly in the realm of the contract of personal service. The accepted principle is that a person cannot be forced to serve, against his will, any person as his employer. Experience shows that many a times, having entered into a contract of personal service, an employee undertakes not to work, during the period of such employment, for anyone else. The court of equity felt that contracts of personal service, being not specifically enforceable, while it was not possible to force the employee, who might have committed the breach of such a contract, to serve his employer, the negative stipulation, which requires the employee not to serve, anyone else, during the period of contract (which he had entered into with earlier employer), must, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of contract of personal service, the courts started granting injunction by applying its judicious discretion so as to make enforcement of negative stipulations more rational. 128. To put it a little differently, the view, prevailing, at one point of time, in England, that a negative stipulation, even in a contract of personal service, could be enforced and must be enforced by way of injunction, has, gradually, undergone a change and with the realisation of the difficulties faced upon such a rigid and inflexible view, the courts have, ultimately, accepted that even in the case of a negative stipulation, injunction is a discretionary remedy and it may or may not be granted by the court depending upon the circumstances of each given case. Some instances, where injunction was either wholly refused or partly granted and partly refused or granted only in a modified form, though the stipulation, sought to be enforced was a negative stipulation, can be traced to the decisions, in Ebraman v. Bartholomew (1898) 1 Ch 671, Relv-a-Bell Burglar and Fire Alarm Co. Ltd. v. Eisler (1626) Ch. 609 William Robinson & Co. Ltd. v. Heuer (1898) 2 Ch. 451, 1937 (1) KB 209 (supra) and (1954) 1 All ER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to do. The bar, created against granting of such an injunction be Section 41(e), is, thus, removed by Section 42; but it does not mean that the court must grant, in India, such an injunction even if the effect of doing so would be to compel the defendant to specifically perform the contract. In India, therefore, a court has a discretion whether or not to enforce a negative stipulation by granting an injunction and the fact that the court has such a discretion is declared, in no uncertain terms, by Section 36 and is further reinforced by Section 38 of the Specific Relief Act. 134. Thus, in tune with the law, as has developed in England, the accepted rule, in India, is that the court will not grant an injunction to restrain breach of a negative stipulation in a contract of personal service, where the effect of doing so would be to compel the defendant to specifically perform the contract. This rule is based upon the principle that the court will not do indirectly what it cannot do directly. A court cannot, for reasons, already pointed out above, grant a decree for specific performance of a contract of personal service. Hence, the court cannot override this limitation by granting in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Gujarat Bottling Co. Ltd. v. Coca Cola Co. (1995) 5 SCC 545, which Mr. Shyam has relied upon to show that a negative stipulation, in a contract, can be enforced by invoking Section 42, the Supreme Court, having referred to the cases of Sunilchand (supra), and Niranjan Shankar Golikari (supra), observed, "...The Court is, however, not bound to grant an injunction in every case and an injunction to enforce a negative covenant would be refused if it would indirectly compel the employee either to idleness or to serve the employer." The observations, which the Supreme Court have taken note of, in Gujarat Bottling Co. (supra), are in respect of enforcement of a negative stipulation in a contract of personal service, the contract of personal service not being specifically enforceable. When the enforcement of a negative covenant, by way of injunction, would make the employee idle or would force the employee, indirectly, to serve the employer, whom the employee does not want to serve, court would not enforce such a negative stipulation, for, it would amount to doing something indirectly, which the court would not have done directly. Thus, negative covenant, even in a commercia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants to transfer the suit land to the respondent. In the present case, if the affirmative part of the agreement, i.e., the agreement to transfer the suit land, in favour of the respondent, fails, preventing the appellants from transferring the suit land to any one, other than the respondent, would not benefit any one. In such circumstances, the question of taking resort to Section 42, in the present case, does not arise at all. 141. What crystallizes from the above discussion is this: The contract, which the parties had entered into, was a contingent contract. Such a contract, in the absence of the conditions having been fulfilled, is not specifically performable? This apart, since the draft agreement, which the respondent insists on the appellants to execute, is not in tune with the terms sheet and the MoU, the contract, in the absence of agreed terms of the contract, cannot be regarded as a concluded contract and is not specifically enforceable. 142. Above all, the contract, in question, as already discussed above, has become impossible to be performed. The contract, therefore, stands frustrated and cannot be specifically enforced. When the specific performance of the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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