2006 (1) TMI 662 - HC - Indian Laws

Summary

Issues:
1. Application under Section 9 of the Arbitration and Conciliation Act, 1996 seeking relief from termination of agreement.
2. Interpretation of the arbitration clause in the agreement dated 08.10.2000.
3. Validity of seeking injunction after termination of a determinable contract.
4. Applicability of Section 9 of the Arbitration and Conciliation Act in cases of determinable contracts.

Analysis:

1. The petitioner, appointed as a single point distributor by the Delhi Vidyut Board, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, claiming that disputes with the respondent led to the termination of the agreement on 3.11.2004. The petitioner sought relief to restrain the respondent from giving effect to the termination letter and restore the status quo ante.

2. The relationship between the parties was governed by an agreement dated 08.10.2000 containing an arbitration clause. Disputes were referred to a sole arbitrator, and the petitioner sought injunctions to prevent the respondent from taking over electricity distribution in the specified colony. The respondent argued that granting such injunctions would amount to enforcing a terminated agreement.

3. The respondent contended that seeking injunctions post-termination of a determinable contract is not maintainable under Section 9 of the Act. Referring to a Division Bench Decision, it was highlighted that contracts determinable in nature cannot be specifically enforced, and injunctions to enforce such contracts are statutorily prohibited.

4. The court, in line with the legal position outlined in the mentioned decision, dismissed the petition under Section 9, emphasizing that relief sought cannot be granted for a determinable contract. The judgment reinforced that seeking specific performance of a determinable contract through injunctions is not permissible under the law, even if termination is found wrongful post-termination.

Therefore, the court dismissed the petition, citing the statutory prohibition on enforcing determinable contracts through injunctions, in accordance with the Specific Relief Act and the provisions of the Arbitration and Conciliation Act.