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2020 (11) TMI 729

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..... tant appeals are that,- appellant in W.A. No. 870 of 2020 is a partnership firm registered under the Partnership Act, 1932, and engaged in the business of importing and subsequently distributing and selling of varied materials, including Galvanized Steel Coils, to entities in and around the State of Kerala, having PAN AASFG7146HFT001. 3. Appellant in W.A. No. 885 of 2020 is engaged in the business of importing and subsequently distributing and selling of varied materials, including grade LLD Polythene, to entities in and around the State of Kerala, having PAN ABJFS5503JFT001. 4. In the appeals, both the appellants are represented by their Managing Partners. Respondent No. 1 is the Ministry of Shipping under the Government of India and the apex body for formulation and administration of rules, regulations and laws relating to shipping. Respondent No. 2 is the statutory Maritime authority, appointed by Government of India and it exercises the powers and functions conferred under the Merchant Shipping Act, 1958 and responsible for implementation of the provisions of Act, 1958. Respondent No. 3 in W.A. No. 870/2020 is an Indian agent of Mediterranean Shipping Company (MSC) .....

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..... es not to impose any container detention charge on import and export shipments for the period from 22-3-2020 to 14-4-2020 (both days inclusive) over and above any free time arrangement that was agreed upon inter se the parties. The 1st respondent-Union of India, thereafter issued Exhibits-P4 and P5 orders dated 31-3-2020 and 21-4-2020, which mandate that each major port shall ensure that no penalties, demurrage, charges, fees, rentals are levied on any port user, including Shipping Lines, in order to facilitate a smooth transition into the end of lockdown, the implication being that the said exemptions and remissions would be passed along the chain of transactions to importers like the appellants. 9. Appellants have further contended that due to the nationwide lockdown and the force majeure situation, services critical to the supply chain logistics industry like courier of original documents required to secure the release of imported cargo were unavailable and it resulted in deadlocks/inordinate delays for clearance of import cargo. 10. While matter stood thus, appellant in W.A. No. 870/2020 approached respondent Nos. 3 and 4 - MSC Agency (India) Pvt. Ltd, Cochin; and O .....

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..... t-P6 and to reimburse any amounts already paid thereto. 14. Before the writ court, the 3rd respondent in W.A. No. 870 of 2020, viz., MSC Agency (India) Pvt. Ltd., Cochin, represented by its Managing Director, has filed a counter affidavit refuting all the allegations raised by the appellant. In the counter affidavit, 3rd respondent has contended, inter alia, that granting the reliefs sought for in W.P. (C) No. 11958/2020 would result in arbitrariness/inequalities and unreasonableness, as it would protect the importer i.e., the petitioner, but not take into account the losses faced by the shipping lines such as the 3rd respondent's Principal, which are much higher compared to the importer. The subject matter of the writ petition in essence is a private lis between the importer and the shipping lines and there is no compelling reasons for this Court to exercise its jurisdiction under Article 226 of the Constitution of India. 15. Respondent No. 3 has further contended that the genesis of the writ petition is that the petitioner was unable to take delivery of the containers discharged at the port by shipping lines, which is not only false but also baseless. By way of an Add .....

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..... ries viz., (i) advisory dated March 29, 2020 i.e. Order No. 7/2020 issued by Director General of Shipping, whereby shipping lines were advised not to impose any container detention charges on import and export shipments for the period between March 22, 2020 and April 14, 2020; and (ii) advisory dated April 22, 2020 i.e. Order No. 11/2020, extending the validity of its First and Second Advisory till May, 2020. In order to appreciate the controversy raised in the writ petition, it is necessary to first set out the manner in which container shipping business is conducted and detention charges are collected from clients (which includes importers/consignees such as the petitioner). The same is extracted hereunder : (a)     The respondent No. 3's Principal are inter alia engaged in the business of carriage of containerized cargo by sea; (b)     Clients (shipper/exporter/consignee/importer) (hereinafter referred to as "Client") approach shipping lines, such as the respondent No. 3's Principal for the carriage of containerized cargo by sea (i.e. from the port of loading to the port of discharge) and/or for transport of containerized cargo (i.e. f .....

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..... m India causing immense losses. (f)      In fact, the heads of all charges payable to shipping lines such as the respondent No. 3's Principal, including the above detention charge, are conveyed to and accepted by the Client prior to the issuance of the Bill of Lading. Pertinently, at the time of booking offering quotation, the shipping lines make these charges involved in the transportation of the containerized cargo available to their Client. The tariff detailing the rates of such charges can also be verified on the shipping line's website. Therefore, the rates of all such charges are fixed and agreed to/accepted by the Client. Thus, the terms of contract are negotiated and accepted prior to issuance of Bill of Lading which evidences the contract between the parties. Pertinently, Clients/ importers are contractually bound to the pay all the aforesaid charges to shipping lines, including detention charges. (g)     It is pertinent to note that such detention charges are in addition to and separate from the charges levied by Ports/Terminal such as ground rent charge. Detention charges are payable by an importer to shipping lines such a .....

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..... e Director General any power or authority to direct shipping lines to waive any of their charges, including detention charges. Accordingly, for the sake of argument, if the advisories are treated to be mandatory, they would be ex-facie ultra vires the provisions of MS Act. Therefore, these orders consciously omit to mention the source of power under which, the advisories have been issued. In effect, respondent No. 3 has sought for unilateral modification of a private contract, agreed to between shipping lines and importers, which is illegal and involves several disputed questions of fact, and is therefore, beyond the scope of Article 226 of the Constitution of India. 20. Respondent No. 3 has further contended that by seeking extension of the advisories (Ext. P6 order) beyond 3rd May, 2020, the petitioner has sought for a direction against respondents 1 and 2 to legislate. According to the 3rd respondent, the above is a policy matter and it is trite law that the petitioner cannot seek a writ of mandamus against Legislature or executive asking them to legislate or seek issuance of delegated Legislature. Further, it is settled law that a writ court cannot direct a Legislature to .....

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..... lative competence or has no authority to issue such advisories qua Shipping lines like respondent No. 3; (iii) directions against respondent Nos. 1 and 2 to issue orders/circulars sans any authority in law (like delegated legislation); (iv) mandamus against respondent Nos. 1 and 2, where there is neither any statutory nor any public duty empowering them to exercise such executive and administrative discretion; (v) mandamus (Writ) against private parties with whom the petitioner therein admittedly has a contractual relationship; (vi) directions which would tantamount a direct interference in a privately negotiated contract between parties, (vii) fails to establish violation of any fundamental rights of the Petitioner; (viii) it seeks enforcement of Writ in contractual matters which is not maintainable as the Petitioner has alternative remedies such as filing a Suit; (ix) involves disputed questions of fact; and (x) has been filed against the agents of shipping lines who are not even signatories to the contract with the petitioner. In any event, no relief ought to have been granted against the agents as the dispute of the petitioner is with the principal. Granting the reliefs sought .....

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..... petition reveals that the real purpose of filing it is a mala fide intention of an importer avoiding business losses at the cost of the Shipping Lines. Under the guise of violation of fundamental rights, the petitioner is attempting to renege on its binding contractual obligations with private parties. (d)     Respondent No. 4 is the agent of its Principal (WAN HAI Lines Singapore Pvt. Ltd.) in India. It is pertinent to note that respondent No. 4 is not even a contractual party to the present dispute. The Shipping Lines are not arrayed as parties to the present writ petition. Therefore, the present writ petition ought to be dismissed in limine on the ground of misjoinder as well non-joinder of necessary parties. In the above circumstances, the 4th respondent prayed for dismissal of the writ petition with costs." 24. A Learned Single Judge of this Court passed the impugned order declining the interim relief of provisional release of containers, which according to the appellants, was without properly considering the facts and law presented in the writ petitions. Relevant portion of the impugned order reads thus : "4. The Learned Counsel for the peti .....

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..... require the waiver of the container detention charges by the private entities, as sought for by the petitioners. 7. The 4th respondent has filed a counter affidavit to oppose the admission of the writ petitions and the grant of the interim relief contending that Exhibit P6 is an advisory, which is neither mandatory or obligatory, and lacks legislative competence, which cannot be extended to the detriment of the private respondents, who are also equally affected by the pandemic and the resultant lockdown. It is stated that if the interim prayer as sought for is issued against private respondents, it would amount to interference in a privately negotiated contract between the parties, which is impermissible in law. It is stated that all due deductions as can be granted in the circumstances had already been extended to the petitioners and that it was not on account of any inconvenience arising due to the lockdown that petitioners have refused to clear the cargo in time. It is contended that the supply chain of imports was only marginally affected, and that too, for a very brief period and that the facts pleaded by the petitioners are disputed by the respondents and that in the .....

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..... ught to have found that upon the declaration of lockdowns successively, 1st respondent, in view of the extraordinary situation and upon a detailed examination of all factors and considering the representations from various stakeholders, had decided to issue directives for exemption and remission of container detention charges on import and export shipments. The 2nd respondent, being the authority to ensure implementation of directives of the 1st respondent, had issued mandates to all ports to ensure strict implementation of the directives. However, consequent to the third and fourth phases of extension of nationwide lockdown by Union of India, the state of affairs having remained the same as in the 1st and 2nd phases, the 2nd respondent ought to have been extended such exemptions and remissions till such date as [and] when the immediate and direct consequences of the national lockdown are no longer severely affecting the EXIM trade. In such circumstances, it is necessary that specific directions shall be issued to respondents 1 and 2, to extend the validity of Ext. P6 DGS Order No. 11 of 2020, dated 22-4-2020 till 30-6-2020 being the bare minimum time needed for the processes to re .....

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..... visions of the Act and the Rules, Regulations, notifications and orders issued thereunder. Thus, respondents are duty bound in law to comply with the mandate of Exts. P2 to P7, failing which, their license itself may be suspended by the authorities. Respondents have clearly exhibited defiance to the directives issued and, therefore, the issuance of Exts. P8 series demands for detention during the national mandatory lockdown period is illegal and unsustainable. (D)    It is further contended that even the Hon'ble Supreme Court has observed that the COVID-19 pandemic is a highly unfortunate situation where a large number of people have suffered and that no one should be permitted to profit off of this misery and that these difficult times require the understanding and compassion of every single person. Writ court has not taken into consideration that there was no bar on the 5th respondent in releasing the imported goods to the appellant and disregard the fact that by refusing to waive the detention and demurrage charges on the imported goods in line with the objective sought to be achieved vide Exts. P2 to P7. According to the appellants, the act of respondents in ig .....

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..... majeure situation in the country and clearly states that the COVID-19 pandemic is to be treated as a case of natural calamity on par with an act of God, as on 19-2-2020. This position is further reinforced in Ext. P4 on 31-3-2020 and in Ext. P5 on 21-4-2020. The free flow of goods in the country was severely disrupted and as unequivocally stated in Exts. P4 and P5, the force majeure situation would continue till such time as notified otherwise by the relevant authorities, which has not occurred as on the date of filing the writ petitions. In these continued extraordinary and unusual circumstances, appellants deferentially seek the just interdiction of this Court in setting aside the impugned order and directing respondents Nos. 1 and 2 to extend the validity of Ext. P6 order till such date as the prevailing situation has been deemed to come to end by the appropriate subordinate authority of the 1st respondent. (H)   It is further contended that writ court has overlooked the contentions raised by the appellants in the respective writ petitions with regard to Section 2(1)(a)(iv) of the Essential Services Management Act, 1968, which specifically states that any service con .....

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..... the mandate of Exhibts P2 to P7, and therefore, the demand for detention and demurrage, and other charges is illegal and unsustainable. Referring to the force majeure situation in the country, taken note of in Exhibit-P2 dated 19-2-2020, issued by Ministry of Finance, Department of Expenditure, Government of Kerala, New Delhi, that COVID-19 pandemic has to be treated as a national calamity in part with an act of God, Learned Counsel for the appellants contended that the writ court has failed to advert to the same. Learned Counsel further contended that the advisories are issued with reference to major ports and that the same were considered with reference to the averments in the case decided by the Delhi High Court and thus, it is distinguishable with the case on hand. 28. Learned Counsel for the appellants further contended that the writ court has failed to consider the earlier interim order dated 25-5-2020 in W.P. (C) No. 10177 of 2020 and its applicability to similarly placed persons like the appellants and that there is violation of Article 14 of the Constitution of India. It is his further contention that the order of the Delhi High Court in C.M. No. 10546 of 2020 in W.P .....

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..... 17" issued by the Department, which is reproduced as under : A Force Majeure (FM) means extraordinary event or circumstance beyond human control such as an event described as an act of God (like a natural calamity) or events such as a war, strike, riots, crimes (but not including negligence or wrong-doing, predictable/seasonal rain and any other events specifically excluded in the clause). An FM clause in the contract frees both parties from contractual liability or obligation when prevented by such events from fulfilling their obligations under the contract. An FM clause does not excuse a party's non-performance entirely, but only suspends it for the duration of the FM. The firm has to give notice of FM as soon as it occurs and it cannot be claimed ex-post facto. There may be a FM situation affecting the purchase organisation only. In such a situation, the purchase organisation is to communicate with the supplier along similar lines as above for further necessary action. If the performance in whole or in part or any obligation under this contract is prevented or delayed by any reason of FM for a period exceeding 90 (Ninety) days, either party may at its option terminate the cont .....

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..... er supply lines at the Indian seaports the shipping lines are advised not to impose any container detention charge on import and export shipments for the period from 22nd March, 2020 to 14th April, 2020 (both days inclusive) over and above free time arrangement that is currently agreed and availed as part of any negotiated contractual terms. During this period, the shipping lines are also advised not to impose any new contractual terms. During this period the shipping lines are also advised not impose any new or additional charge. This decision is purely a onetime measure to deal with the present disruptions caused by spread of COVID-19 epidemic. Sd/- (Amitabh Kumar) Director General of Shipping" 35. Orders dated 31-3-2020 (Exhibit-P4) and 21-4-2020 (Exhibit-P5) issued by the Director, Government of India, Ministry of Shipping to the Chairperson & CMD of all major ports, is extracted hereunder : No. PD-14300/4/2020-PD VII Government of India Ministry of Shipping Transport Bhawan, 1, Parliament Street, New Delhi-11 0001 Dated 31st March, 2020 To, Chairperson & CMD All Major Ports. Sub. :      Guidelines to Major Ports on (i) Exem .....

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..... f God (like natural calamity)" has clarified that spread of corona virus should be considered as a case of natural calamity and Force Majeure may be invoked. 6. The Ministry of Shipping, Government of India through Order No PD-13/33/2020-PPP/C-339106, dated 20-3-2020 and letter dated 24th March, 2020 has already intimated the Major Ports that the COVID-19 pandemic can be considered as a 'natural calamity' that would entitle invocation of force majeure' provisions inasmuch as obligations under various contracts (involving the Major Ports) are concerned. 7. The aforesaid orders do not impact or dilute the fact that each Major Port needs to remain operational during the COVID-19 pandemic and continue cargo operations in all respects. 8. In view of the situation arising because of the COVID-19 pandemic and after considering the representations received from various stakeholders, Major Ports are directed that - (i)      The period for completion of any Project under implementation in PPP mode or otherwise, can be extended by the Ports. (ii)    For existing and operational PPP projects, the Major Ports can permit waiver of .....

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..... sentations received from various stakeholders, all Major Ports are directed that :- 3. Remission of charges to Port Users : (i)      Storage Charges : Ports shall allow free storage time to all port users for the Lockdown Period. (ii)    Lease rentals, licence fees related charges : Ports shall allow deferment of April, May and June months, annual lease rentals/licence fees on pro rata basis, without any interest, if requested by lessee/licensee. This shall be applicable only for the annual lease rentals/licence fee to be received by port for year 2020. (iii)   Other Charges, penalties etc. : Ports shall ensure that no penal charges, demurrages, detention charges, dwell time charges, anchorage charges, penal berth hire charges, performance related penalties etc. are levied on any port user (traders, importer, exporters, shipping lines, concessionaires, licensees, CFS, etc.) for any delay in berthing, loading/unloading operations or evacuation/arrival of cargo during the Lockdown Period plus 30 days recovery period. (iv)   Additional land for storage : If requisite additional land is avail .....

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..... y any penalty or charges for any shortfall in any performance standards such as gross berth output, transit storage dwell time, turnaround time for delivery store receipt operations, non-transhipment requirements etc. for the Lockdown Period plus 30 days recovery period. (v)     Additional Land for storage : If requisite additional area is available within port, the port shall provide additional storage area to PPP concessionaires, on temporary basis, without any charges, rentals, fee etc. for upto 30th June 2020 on 'as is where is' basis. 5. Vessel related charges from Shipping Lines : Marine Due/Vessel related charges: Ports shall allow interest free 60 days deferment of marine dues/vessel related charges to Indian coastal vessels, if requested by vessel operators. Ports shall obtain requisite Bank Guarantee, as security, from coastal vessel operators for the same. Only deferment requests received by 30th May 2020 shall be considered. 6. Force Majeure : The Ministry of Finance vide OM No. 18/4/2020-PPD, dated 19th February, 2020 inter alia citing "A Force majeure (FM) means extraordinary events or circumstances beyond human control su .....

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..... appropriate action. 11. This order supersedes the Order No. PD-14300/4/2020-PD VII dated 31st March 2020. 12. This order is issued under Section 111 of Major Port Trusts Act, 1963 with the approval of Hon'ble Minister of State for Shipping (IC) and to be implemented with immediate effect. This order shall also be followed by Kamarajar Port Limited.  Yours faithfully, Sd/- (Arvind Chaudhary) Director." 36. DGS Order No. 11 of 2020, dated 22-4-2020 (Exhibit-P6) issued by the Director General of Shipping, Mumbai is extracted hereunder : "F. No. MTO/Review Schedule-II (1)/2019       Dated : 22-4-2020 DGS Order No. 11 of 2020 Sub. :      Extension of validity of DGS Order No. 07 of 2020, dated 29-3-2020 and modification of DGS Order No. 08 of 2020, dated 31-3-2020. Whereas, DGS Order No. 07 of 2020, dated 29-3-2020 was issued as an advisory on non-charging of container detention charges on import and export shipments, for the period 22nd March, 2020 to 14th April, 2020 (both days inclusive). 2. Whereas, DGS No. 08 of 2020, dated 31-3-2020 was issued as an advisory on non-charging of an .....

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..... ngement that is currently agreed and availed as part of any negotiated contractual terms. During this period the shipping companies or carriers (and their agents) are also advised not to impose any new or additional charge. This decision is a onetime measure to factor-in the present situation arising out of COVID-19 pandemic.  Sd/- (Amitabh Kumar) Director General of Shipping" 37. Letter dated 23-4-2020 (Exhibit-P7) issued by the Director General of Shipping, Mumbai, is extracted hereunder : "F.No. 394/46/2020-Cus. (AS) Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes & Customs Anti-Smuggling Unit ************* Room No. 501, 5th Floor, Hudco Vishala Building, Bhikamaji Cama Place, New Delhi-110066 Dated : 23-4-2020 To, All Principal Chief Commissioner/Chief Commissioner of Customs, All Principal Chief Commissioner/Chief Commissioner of Customs (Preventive), All Principal Chief Commissioner/Chief Commissioner of CGST & Customs. Madam/Sir, Subject :  Covid-19 Pandemic - waiver of Demurrage Charges levied by ICDs/CFSs/Port/Terminal Operators during lockdown - Reg. The Ministry of Home Affairs, Gove .....

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..... (Ext. P5) and DGS Order No. 11 of 2020, dated 22-4-2020 (Ext. P6). (ii)    Extend the validity of DGS Order No. 11 of 2020, dated 22-4-2020 (Ext. P6) till 30-6-2020 or till such date that this Court deems fit and proper in the peculiar facts and circumstances of the case. (iii)   Issue a writ of mandamus or any other appropriate writ, order or direction, commanding the respondents to permit the petitioner herein to clear the imports covered by Exhibit-P1 series Bills of Lading by extending the benefit of Exhibit-P6 and to reimburse any amounts already paid thereto. 39. Pending disposal of the writ petitions, interim relief sought for by the appellants are as follows : "For the reasons stated in the memorandum of writ petitions and the affidavits filed in support thereof, it is most humbly prayed that this Court may be pleased to direct the respondents to provisionally permit the petitioners to clear the imports covered by Exhibit-P1 Bills of Lading by issuance of final delivery order by applying and extending the benefit of Exhibit-P6 order No. 11 of 2020 issued by the 2nd respondent of non-charging liner detention, demurrage and ground rent, i .....

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..... Taking an objection of Section 44 of the Transfer of Property Act, 1882, the plaintiff filed the suit for a decree of permanent injunction against the defendants. Granting the relief of interlocutory mandatory injunction thereby directing respondent No. 4 (who had purchased the undivided share of other respondents in suit property and had also shifted to the premises) to vacate the suit property, the Hon'ble Supreme Court observed that there is strong possibility of plaintiff getting relief prayed for by him in the suit. The Hon'ble Court further held that the comparative mischief or inconvenience which is likely to issue from withholding the injunction will be greater than that which is likely to arise from granting it and hence the balance of convenience is in favour of the Plaintiff." (iii)   In Deoraj v. State of Maharashtra reported in AIR 2004 SC 1975, the Hon'ble Supreme Court, at para 12, held as follows : "Situations emerge where the granting of an interim relief would tantamount to granting the final relief itself. And then there may be converse cases where withholding of an interim relief would tantamount to dismissal of main petition itself; for, by the ti .....

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..... oncerned about the balance of convenience, the public interest and a host of other considerations. [See Assistant Collector of Central Excise, West Bengal v. Dunlop India Ltd. [1985 (1) SCC 260 at p. 265], State of Rajasthan v. M/s. Swaika Properties [1985 (3) SCC 217 at p. 224], State of U.P. and Ors. v. Visheshwar [1995 Supp (3) SCC 590], Bharatbhushan Sonaji Kshirsagar (Dr.) v. Abdul Khaiik Mohd. Musa and Ors. [1995 Supp (2) SCC 593], Shiv Shankar and Ors. v. Board of Directors, U.P.S.R.T.C. and Anr. (1995 Supp (2) SCC 726) and Commissioner/Secretary to Govt. Health and Medical Education Department Civil Sectt., Jammu v. Dr. Ashok Kumar Kohli [1995 Supp (4) SCC 214)]. No basis has been indicated as to why learned Single Judge thought the course as directed was necessary to be adopted. Even it was not indicated that a prima facie case was made out though as noted above that itself is not sufficient. We, therefore, set aside the order passed by learned Single Judge as affirmed by the Division Bench without expressing any opinion on the merits of the case we have interfered primarily on the ground that the final relief has been granted at an interim stage without justifiable reason .....

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..... ndent No. 1 & 2, the balance of convenience also does not lie in favour of the petitioner. 50. In the end, it may be noted that even no irreparable loss is going to be caused to the petitioner if injunction/restrained order is not granted for the reason that if this court finally comes to a conclusion that these letters were not in the form of advisories/guidelines but were in fact binding directions, the petitioner can recover the ground rent/penal charges paid by them to respondent No. 3 to 6. 51. In view of the above detailed discussions, no grounds for grant of injunction/restrain order in favour of the petitioner and against the respondents are made out at this stage. The application filed by petitioner under Section 151 of CPC for injunction is, therefore, dismissed." 42. Though Mr. Aswin Gopakumar, Learned Counsel for the appellants, made an attempt to distinguish the interim order of the Hon'ble High Court of Delhi, stated above, we are not inclined to accept the same for the reason that what is observed by the Hon'ble Delhi High Court is that demand for detention and demurrage charges, is contractual between the appellants and the service providers. At .....

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