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TMI Blog2015 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... l. In view of the categorical assertion made by the appellant and the undertaking that the appellant would consume the entire iron ore excavated captively, there is no reason to give any direction to the appellant to sell the iron ore to the respondent during the pendency of the arbitration - Such a direction, would virtually amount to the enforcement of the agreement without adjudication of the right of the respondent to seek specific performance of the agreement - no doubt, if the appellant company were to be selling the iron ore excavated by it to any third party, there was some justification by the respondent to seek an interim direction to the appellant to sell the ore to the respondent, subject of course to the determination of the cause finally in the arbitration proceedings - But it is not the case here – respondent submitted that in case an interim order is not granted, even if the respondent eventually succeeds in the arbitration proceedings and obtains an award for the specific performance of the agreement, the success would remain only on paper as huge amount of mineral excavated by the appellant would already have been sold by that time and there is no way of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be carried on by M/s. Metsil Exports Pvt. Ltd. (Metsil) which is said to be an associate company of the respondent herein on various terms and conditions, the details of which may not be necessary. The agreement is dated 27.2.2005 between the appellant herein and Metsil. The agreement is styled as Raising Contract . The second agreement is between the appellant and the respondent herein for the sale of iron ore extracted by Metsil for being utilised in a sponge iron plant to be jointly set up by the appellant and the respondent herein. According to the appellant, both the contracts are inter dependent. Failure of the first contract automatically results in failure of the second contract. 7. However, the appellant claims to have realised on 22nd June, 2007 that the Raising Contract by which the activity of mining was sought to be entrusted to Metsil is in violation of Rule 37 of the Mineral Concession Rules, 1960, therefore, the appellant sent letters to the respondent as well as to the Metsil purporting to terminate both the contracts. It is stated at the Bar that, admittedly, Metsil never questioned the termination of the contract. However, the respondent company chose to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier. The findings and observation of the learned Trial Judge so also ours shall be regarded as being tentative, and it will not be binding effect either at the time of hearing of the arbitration agreement or at the time of final hearing of the interlocutory application pending before learned Trial Judge. The above observations of the Division Bench fully protect the interest of both parties .. 10. A.P.O.T. No.245/2012 eventually came to be disposed of by an order dated 5.9.2012. The relevant portion of the order reads as follows: The Petitioner is not entitled to any interlocutory injunction in aid the claim for specific performance of the selling agreement that it has carried to the arbitral reference. In the light of the prima facie view taken that the Metsil and the petitioner combine had entered into a composite arrangement with the respondent, the petitioner s knowledge of the alleged breach of the agreement by the Respondent would date back several months before it made the polite enquiry with the respondent by its letter of December 24, 2009. Such delay would amount, in the circumstances to latches and conduct encouraging the respondent to believe in the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ore to the respondent? 14. By the order under appeal, the High Court directed the appellant not to sell the iron ore to any third party without first offering the same to the respondent herein and also to maintain accounts of the iron ore raised by the appellant from the said mines from the date of commencement of the mining operation. 15. It is the categoric stand of the appellant herein in the SLP that during the pendency of this litigation, the appellant has already set up a beneficiation-cum-pelletisation plant where the entire quantity of iron ore extracted by the appellant is being consumed as a raw material. Therefore, the question of the appellant selling the iron ore to any third party does not arise at all. Consequently, the second question of offering the ore for sale to the respondent before selling it to a third party equally does not arise. 16. While ordering notice on18.7.2014 in the instant appeal, it was directed by the Court that the appellant will maintain record/account of all the ore consumed by the appellant during the pendency of this matter. 17. When the matter was taken up for hearing it was once again reiterated by the appellant that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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