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Issues Involved:
1. Specific Performance of Contract 2. Negative Covenant 3. Adequacy of Consideration 4. Allegations of Undue Influence and Economic Duress 5. Balance of Convenience 6. Interim Injunction Issue-wise Detailed Analysis: 1. Specific Performance of Contract: The plaintiff instituted a suit for specific performance of an Agreement dated 1st Oct. 1994, which involved the sale and delivery of Manganese ore and Iron ore from a mine. The Agreement included a clause (Clause 13) that provided rights to specifically enforce the terms and obligations. The defendant contended that the contract could not be specifically enforced due to Sections 10 and 14 of the Specific Relief Act, 1963, arguing that damages for non-performance would be adequate relief. 2. Negative Covenant: Clause 12 of the Agreement contained a negative covenant, stating that the defendant shall not sell or dispose of any Manganese and Iron ore to anyone other than the plaintiff. The plaintiff argued that this negative covenant could be specifically enforced, citing Section 42 of the Specific Relief Act and various case laws. The court upheld the enforceability of the negative covenant, referencing the case of Richard Wheeler Doherty v. James Clagston Allman and W.C. Dowden, which emphasized that equity would enforce such covenants to maintain good faith in contracts. 3. Adequacy of Consideration: The defendant argued that the price fixed under the contract was extremely low, making the contract unconscionable. The court, however, noted that mere inadequacy of consideration is not a ground for refusing to perform contractual obligations. The court cited Treitel on Contract and specific provisions in the Specific Relief Act, emphasizing that equity does not entertain the plea of inadequacy of consideration unless there is undue influence or duress. 4. Allegations of Undue Influence and Economic Duress: The defendant claimed that he was forced to sign the Agreement under undue influence and financial distress, without realizing its scope and effect. The court rejected these claims, noting the absence of any protest, police report, or legal action challenging the Agreement. The court referenced the judgment in Pao On v. Lau Yiu, which discussed economic duress and emphasized that the victim must have no alternative course open and must be confronted with coercive acts. 5. Balance of Convenience: The defendant argued that the balance of convenience was in his favor, as granting an injunction would prevent the mine from operating profitably. The plaintiff countered that denying the injunction would effectively dismiss the suit at the interlocutory stage. The court held that in cases involving a negative covenant, the balance of convenience and adequacy of damages become less important. The court referenced the case of Richard Wheeler Doherty v. James Clagston Allman and W.C. Dowden, which stated that equity enforces negative covenants without considering the balance of convenience. 6. Interim Injunction: The plaintiff sought an interim injunction to restrain the defendant from selling ore to third parties. The defendant argued that such an injunction would effectively decree the suit at the interlocutory stage. The court, however, granted the interim injunction, emphasizing the enforceability of the negative covenant and the need to maintain the contractual agreement during the suit's pendency. The court referenced cases like James Jones & Sons, Ltd. v. Earl of Tankerville, which supported granting injunctions to enforce negative covenants even at the interlocutory stage. Conclusion: The court upheld the plaintiff's right to specifically enforce the Agreement, including the negative covenant. The allegations of undue influence and economic duress were rejected, and the court granted the interim injunction to maintain the status quo during the suit's pendency. The court emphasized that mere inadequacy of consideration is not a ground to refuse specific performance and that equity enforces negative covenants to maintain contractual good faith.
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