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2020 (11) TMI 729

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..... ions of the contesting parties, the order, which was taken note of by the Learned Single Judge in the impugned order, and the decisions on interim relief vis-a-vis main relief considered by us, we are of the considered view that there is no error in the interim order dated 30-6-2020, warranting interference in the instant appeals. Appeal dismissed. - W.A. Nos. 870 & 885 of 2020 - - - Dated:- 22-7-2020 - S. Manikumar, CJ. and Shaji P. Chaly, J. Shri Aswin Gopakumar, Anwin Gopakumar, K. Amal Nath Naik, Niranjan Sudhir, Smt. Femy Ann Johnson and Kandampully Vikram, Advocates, for the Appellant. Shri P. Vijayakumar, ASGI, S. Ramesh Babu, Senior Advocate, Sreelal N. Warrier, SC, Pranoy K. Kottaram and V. Abraham Markose, Advocates, for the Respondent. JUDGMENT [Judgment per : S. Manikumar, CJ.]. - Instant writ appeals are filed against order dated 30-6-2020 passed by a Learned Single Judge of this Court in W.P. (C) No. 11958 of 2020 and connected cases. By the said order, writ petitions were admitted and the interim relief sought for by the petitioners was declined. However, the Learned Single Judge ordered that the payment of container detention charges or o .....

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..... Port on 24-4-2020 and 7-5-2020, reached Cochin on 11-5-2020 and 25-5-2020 respectively. 7. Meanwhile, due to the outbreak of COVID-19 pandemic, China underwent a massive and complete lockdown which entirely prohibited movement by any individual in the country. Recognizing the potentially cascading effects of disruption of China s supply chain industry, Ministry of Finance vide Exhibit-P2 Office Memorandum No. F.18/4/2020-PPD, dated 19-2-2020 has clarified that said disruption of supply chains due to the spread of Coronavirus in China or any other country will be covered in the Force Majeure clause. Upon declaration of COVID-19 as a pandemic by World Health Organisation and with the number of deaths increasing, Ministry of Home Affairs vide Order No. 40-3/2020-DM-1(A), dated 24-3-2020 declared a nationwide lockdown till 14-4-2020 and declared the lockdown measures to be put in place. Thereafter, as per addendum issued on 25-3-2020 to the abovesaid order, Ministry of Home Affairs exempted seaports and its operational organisations from lockdown, to ensure regular supply of goods. 8. Appellants have further contended that in order to provide much needed relief to the stakeholder .....

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..... in W.A. No. 885/2020 further contended that the original documents of import containers were still in transit at the time of issuing Exhibit-P8 series, as evident from Exhibit-P9 series. They further contended that in view of the fact that lockdown has highly prejudiced many importers like the appellants, by the charge of detention, demurrage and ground rent, it is only just and proper that the validity of Exhibits-P5 and P6 orders dated 21-4-2020 and 22-4-2020 be extended. 13. In the above circumstances, the appellants have filed W.P. (C) No. 11958 12256 of 2020 seeking the following reliefs : (i) Issue a writ of mandamus or any other appropriate writ, direction or order, commanding respondents 1 and 2 to ensure strict compliance of Order No. PD-14033/4/2020-PD-VII, dated 21-4-2020 (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 .....

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..... y agreed free time of 14 days, on compassionate and humanitarian grounds. Furthermore, during the above lockdown period, respondent No. 4 s Principal continued to extend all services to its clients, including importers such as the petitioner, without any major disruptions. Employees of respondent No.4 and its Principal continued to work from home, to ensure that the import process continued seamlessly. According to the 3rd respondent, a careful examination of the writ 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 i.e. respondent No. 3 s Principal. 16. Respondent No. 3 has further contended that it is one of the agents of its Principal (MSC Mediterranean Shipping Company S.A.), (Respondent No. 3 s Principal) in India. It is pertinent to note that the 3rd respondent 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 writ petition ough .....

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..... s between the carrier and the Client. Pertinently in the facts of the present, case, the agent of shipping line such as the respondent No. 3 are not party to such contracts of carriage. (e) Once the container arrives at the port of discharge, importers are given a free period, which may range depending on the negotiation contract upto 21 days, to destuff the container (i.e. remove their cargo and deliver the empty container back to the shipping lines). In the event that an importer does not return the empty container to the shipping lines within the contractually agreed period, a detention charge is levied. The detention charges and free days are based on binding agreement between the parties. These detention charges form an important part of the agreement between the parties, inter alia, on account of the fact that containers are important assets of shipping lines and their earnings are directly dependent on the same. Containers, including empty containers, are an important component in the complete supply chain of import and export. Without empty containers, shipping lines such as the respondent No. 3 s Principal may be unable to accept future orders thereby resulting in t .....

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..... al rights against private parties such as respondent No. 3, who is not a State within the meaning of Article 12 of the Constitution of India. As detailed herein, such dispute pertains to private contract between the importers and the shipping lines. In any event, respondent No. 3 cannot be said to be State , and therefore, enforcement of contractual obligations by private parties cannot lead to deprivation or violation of fundamental rights guaranteed to the petitioner. Hence, the writ petition is not maintainable. 19. Respondent No. 3 have further contended that the advisories are issued without any authority or jurisdiction as there is no provision under the Merchant Shipping Act which empowers Director General of Shipping to issue them. That apart, the circular issued by the Director, Anti-Smuggling, Central Board of Indirect Taxes and Customs has been issued without any authority under the Customs Act, 1962. That apart, it is contended that the Directorate General of Shipping is a body created under the Merchant Shipping Act, 1958 ( MS Act ). The MS Act, inter alia, governs the powers and functions of Director General of Shipping and does not grant the Director General an .....

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..... e that the import process continued seamlessly. For this purpose, respondent No. 3 s Principal, inter alia, has amended their regular procedure through the use of electronic facilitation by enabling digital document transaction for release of cargo, thereby also staying in sync with social distancing and safety norms. That apart, respondent No. 3 s Principal promoted digital payment of all dues for release of cargo and urged clients to use e-portals like OdeX, for electronic invoicing, electronic delivery order or faster payment solutions for faster release of import delivery orders. Further, all other facilities were provided in e -platforms, details of which are also furnished in the counter. 23. Before the writ court, Omega Shipping Agencies Pvt. Ltd., Kerala represented by its Managing Director, the 4th respondent in W.A. No. 870 of 2020, has filed a counter affidavit contending as follows : (a) Writ Petition is not maintainable, inter alia, as it seeks (i) enforcement/extension of advisories that are neither mandatory nor binding: (ii) enforcement and continuance of order/circulars of DG Shipping, which lacks legislative competence or has no authority to issue such .....

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..... y working from home, in accordance with directives issued by the Government. Pertinently, even during the lockdown, respondent No. 4 s Principal continued to discharge containers at various ports across India and importers not only took delivery of the same, but also returned the destuffed containers. The available data unequivocally demonstrates that supply chain of imports was marginally affected and that too, for a brief period. Despite the same, respondent No. 4 s Principal voluntarily extended a one-time benefit of a waiver of detention charges from 22nd March, 2020 to 3rd May, 2020, in addition to the contractually agreed free time of 14 days, on compassionate and humanitarian grounds. Furthermore, during the period of this lockdown respondent No. 4 s Principal continued to extend all services to its clients, including importers such as the petitioner, without any major disruptions. Employees of respondent No. 4 and its Principal continued to work from home, to ensure that the import process continued seamlessly. (c) Respondent No. 4 has further contended that perusal of the writ petition reveals that the real purpose of filing it is a mala fide intention of an importe .....

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..... ation be enforced as against private entities like the shipping lines, their agents or carrying and forwarding agents, who are not directly bound by such directions. It is contended that Exhibit P6 and the earlier DGS orders are specifically time bound and the provision with regard to non-charging of detention charges on import and export shipments was in force only upto 3rd May, 2020 and the same has not been extended beyond the said date and that there is no proposal for such extension either. It is stated that it is only Exhibit P6 that binds shipping companies and their agents and that the period of such exemption had ended on 3-5-2020. 6. The Learned Counsel for the 6th respondent, Major Port Trusts, also supports the submissions of the Learned ASGI. It is submitted that the Port has not charged any demurrage or detention charges in contravention of the directives issued to it and that the dispute between the petitioner and the shipping agents or the carrying and forwarding agents are strictly contractual in nature and that the Port has no authority to require the waiver of the container detention charges by the private entities, as sought for by the petitioners. 7. The .....

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..... view of the matter and in view of the specific contentions raised by the Union Government that the orders in question are but advisories issued which have no binding effect on the private entities like the respondents in these cases and in view of the specific contention that the issue is covered by concluded contracts between the parties, I am of the opinion that an interim order as sought for is not warranted in the facts and circumstances of the instant case. 10. The writ petitions are admitted. The respondents appear through the respective counsel. Time is granted to place pleadings on record. However, the interim order sought for is declined. The payment of container detention charges or other penal charges by the petitioner for release of the cargo covered by the Bills of Lading shall be provisional and subject to further orders in this writ petition. Post on 30-7-2020. 25. Being aggrieved, instant writ appeals have been filed on the following grounds. (A) Writ court manifestly erred on law and facts, and ought to have found that upon the declaration of lockdowns successively, 1st respondent, in view of the extraordinary situation and upon a detailed examinati .....

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..... demands for detention charges. Therefore, Ext. P8 series is illegal and unsustainable and contrary to the objectives sought to be achieved vide Exts. P2 to P7. (C) It is further contended that the writ court has, in the impugned order, failed to appreciate that the appellants are facing ever increasing detention charges due to the stubborn and unjust position taken by respondents. Appellants are being forced into a position of cascading liabilities owing to reasons entirely out of their control as a consequence of the global COVID-19 pandemic and the same warrants interference of this Court in extending the beneficial contents of Exts. P5 and P6, for a period, so as to permit the EXIM trade to regularize and revitalize in an organic manner without suffering a catastrophic meltdown. Writ court has failed to take into consideration the fact that Regulation 6(9) of the Handling of Cargo in Customs Areas Regulations, 2009 makes it mandatory for customs cargo service providers to abide by all the provisions 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 .....

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..... t to be achieved by Exts. P2 to P7. It is also contended that the respondents are deriving the benefit from the waivers permitted to them under Exts. P2 to P7 and it is explicitly stated that the objective of these exemptions, remissions and waivers provided by respondent 1 and 2 to various port users is to assist in stabilizing the supply chain business and ultimately, provide benefit to the end user the consumer. In the case on hand, respondents Nos. 3 and 4 seek to appropriate the beneficial provisions of Exts. P2 to P7, meant for the end consumer, for their personal illegal enrichment by knowingly refraining from passing along the benefits received by virtue of Exts. P2 to P7. This fact has been completely ignored in the impugned order while considering the urgent need for interim relief. (G) It is most respectfully submitted that the writ court has erred in law and has failed to recognize that Ext. P2 effectively declares a force 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 .....

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..... respondents at the face value and determined that no relief is necessary for the appellants, who are facing an existential crises. 26. Based on the grounds, Mr. Aswin Gopakumar, Learned Counsel for the appellants, reiterated that the writ court failed to consider the advisories and periodical orders, issued during COVID-19 lockdown period by the Ministry of Finance, Department of Expenditure, Government of India, New Delhi, Director General of Shipping, Mumbai respectively, taking note of the issues ranging from transport difficulties, non-availability of loading and unloading at the ports, closure of ports during the lockdown period, and that there was intention on the part of the appellants to take delivery of the consignments. 27. In the light of the advisories and orders of the Director General of Shipping, Mumbai read with regulations issued under the Customs Regulations, 2009, respondents are bound to comply with 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 .....

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..... have been provided in the impugned interim order, and that there is no merit in the writ appeals warranting interference. Further contention has been made that writ petition is not maintainable against the 3rd respondent, as the matter between the appellants and the 3rd respondent is purely contractual. 32. Heard Learned Counsel for the parties and perused the material available on record. 33. Office Memorandum dated 19-2-2020 (Exhibit-P2) issued by the Ministry of Finance, Government of India, Department of Expenditure, New Delhi, is extracted hereunder : No. F.18/4/2020-PPD Government of India Ministry of finance Department of Expenditure Procurement Policy Division ************ Room No. 512, Lok Nayak Bhavan, New Delhi, dated the 19th February, 2020 OFFICE MEMORANDUM Subject : force Majeure Clause (FMC) Attention is invited to para 9.7.7 of the Manual for Procurement of Goods, 2017 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, cri .....

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..... rnment is working towards smooth functioning of the Ports and its operational organisations, some delays in evacuation of goods from the ports have become inevitable due to the disturbance of the downstream services. 4. Whereas, as a result of these developments some cargo owners have either suspended their operations or are finding it difficult to transport goods/cargo and complete the paper work, resulting in detention of containers without their fault. 5. Whereas, some shipping lines have on their own volition, decided to suspend imposition of any container detention charges for a limited period to give relief to the importers and exporters. There is, however, a need for more clarity in this respect for smooth functioning of the trade and maintenance of supply chain in the country. 6. Now therefore, in order to maintain proper 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 t .....

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..... g lines, concessionaires, licensees etc.) for any delay in berthing, loading/unloading operations or evacuation/arrival of cargo caused by the reasons attributable to lockdown measures from 22nd March to 14th April, 2020. (ii) Therefore, each Major Port shall exempt or remit demurrage, ground rent over and above the free period, penal anchorage/berth hire charges and any other performance related penalties that may be levied on port related activities including minimum performance guarantee, wherever applicable. Part B - Issues relating to Force Majeure 5. The Ministry of Finance vide OM No. 18/4/2020-PPD, dated 19th March, 2020 inter alia citing A Force majeure (FM) means extraordinary events or circumstances beyond human control such as an event described as an Act of 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 cala .....

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..... d 24-3-2020 and subsequent order dated 15-4-2020 along with its amendments to impose lockdown from 22nd March to 3rd May, 2020 (hereafter Lockdown Period ) to contain COVID-19 pandemic in the country. The lockdown measures and associated disruptions in logistic chains have impacted the Indian ports and port users. There is an impact in the form of drop in imports exports volumes, delays in evacuation of cargo, cash flow issues etc. resulting in inability of port users, concessionaires and other stakeholders to fulfil their obligations to port authorities and banks/lenders. In view of this extraordinary situation and after considering the representations 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 recei .....

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..... milar charges for the month of April, 2020. If such waived amount has already been received by port, adjustment of the same shall be provided in the forthcoming from concessionaire. (iii) Minimum Guaranteed Throughput (MGT) obligations : The MGT obligations (wherever existent in concessionaire agreements) shall be computed, for the respective year, without considering the Lockdown Period and cargo volume handled during said period. (iv) Performance standard related obligations : Ports shall not levy 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 defe .....

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..... n this order shall be extended to only port related activities, industries and commercial establishments. This order shall not be applicable on any captive user, Central or State Govt. entities, local bodies, PSUs, CPSEs. 10. Port shall ensure strict implementation of this order by port users including PPP concessioners, CFS, ICD, Shipping lines etc. If required, ports shall invoke relevant provisions of agreements and take 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 .....

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..... wners/consignees of non-containerized cargo (i.e. bulk, brake bulk liquid cargo) whether LCL or not for the period from 15th April, 2020 to 3rd May, 2020 (both days inclusive), due to delay in berthing, loading/unloading operations or evacuation/arrival of cargo. 8. The above exemptions/remissions shall be over and above free time arrangement 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/Chi .....

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..... Sd/- (Sharad Srivastava) Director (AS) 38. At the risk of repetition, the prayers made in the writ petitions are as follows : (i) Issue a writ of mandamus or any other appropriate writ, direction or order, commanding respondents 1 and 2 to ensure strict compliance of Order No. PD-14033/4/2020-PD-VII, dated 21-4-2020 (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 .....

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..... property of which the plaintiff was owner of an undivided half share. The plaintiff had filed the suit on the ground that the suit property is a dwelling house belonging to an undivided family and there had not been any division of the said property at any point of time. 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 .....

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..... r has to be ignored. Time and again this Court has deprecated the practice of granting interim orders which practically give the principal relief sought in the petition for no better reason than that of a prima facie case has been made out, without being concerned 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 .....

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..... on record which prima facie suggests that any right of the petitioner has been violated by the respondents. This Court is further of the opinion that since respondent No. 3 to 6 are not bound by various guidelines/letters/advisories issued by respondent 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, stat .....

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