2001 (3) TMI 969 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality and validity of the ex parte ad interim order of injunction.
2. Failure of the Single Judge to decide on the application for vacation of the ex parte ad interim order within the stipulated time.
3. Maintainability of the suit for mandatory injunction and specific performance.
4. Prima facie case and irreparable loss for granting an injunction.

Detailed Analysis:

1. Legality and Validity of the Ex Parte Ad Interim Order of Injunction:
The appellant challenged the ex parte ad interim order of injunction passed on 18-2-1999 by the Single Judge, which restrained the appellant from getting the machines released from the bond of Bombay Customs. The appellant argued that this order was issued without proper consideration and needed to be vacated.

2. Failure of the Single Judge to Decide on the Application for Vacation of the Ex Parte Ad Interim Order:
The appellant contended that despite applying for the vacation of the ex parte ad interim order, the Single Judge failed to decide the application within the time-limit provided under Rule 3(A) of Order 39 C.P.C. This delay in decision-making was argued to make the appeal maintainable, referencing the Supreme Court decision in CA No. 5102 of 2000 (A. Venkatasubbiah Naidu v. S. Chellappan and Others).

3. Maintainability of the Suit for Mandatory Injunction and Specific Performance:
The respondent initially filed a suit for mandatory injunction to direct the appellant to accept payment and complete documentation for the sale of two machines. However, the suit was not properly valued and did not initially seek specific performance of the contract. The court noted that such a suit was not maintainable under Section 58 of the Sale of Goods Act, 1930, which requires a suit for specific performance subject to Chapter II of the Specific Relief Act, 1877. The respondent later amended the plaint to seek specific performance of the agreement dated 12-1-1999 or, alternatively, damages of Rs. 56,00,000/-.

4. Prima Facie Case and Irreparable Loss for Granting an Injunction:
The court evaluated whether the respondent had a prima facie case and whether irreparable loss would be caused if the injunction was not granted. The court found that the respondent did not have a strong prima facie case. Additionally, the court noted that the respondent would not suffer irreparable loss as compensation could be awarded if the respondent's claim was ultimately upheld. The appellant's counsel also assured the court that similar machines could be supplied if specific performance was decreed.

Conclusion:
The court concluded that the ex parte order of injunction should be vacated. It noted that the suit as initially filed was not maintainable and that the respondent did not demonstrate a prima facie case or irreparable loss. The court took on record the appellant's commitment to supply similar machines if specific performance was decreed. Consequently, the appeal was allowed, the impugned order was set aside, and the respondent's application was dismissed. The observations made were specific to the appeal and would not prejudice the merits of the case for either party.