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TMI Blog2017 (8) TMI 1712X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction and development of a "project", according to the plans, designs and project report prepared by the respondent, taking all the approvals, permits etc. and by complying with the laws so as to ensure "bio-diversity". It was for 32 years to be renewed for a further period of 32 years. The petitioner was required to make an initial payment of Rs. 70 lakhs followed by an annual fee. 3. This application under Section 9 of the Arbitration and Conciliation Act, 1996 has been made further to an arbitration clause in the agreement. The petition is in two volumes. All the papers that would have been necessary to dispose of the Section 9 application are included in the petition. Extensive arguments have been made. I propose to dispose of this application, on these papers without inviting affidavits. It goes without saying that the allegations made in the petition, are denied by the respondent. 4. We have to take our starting point as 8th March, 2017. On that day the Principal Secretary Tourism Department wrote to the Managing Director of the petitioner telling him that his government had invested more than Rs. 9 crores in the project. They had set up the jetty, built roads made availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facilities. d. Absence of noise level monitoring. e. Absence of embankment around the project. f. Total built up area is 24773 sqm. So it may require environment clearance g. Cooking facility of workers is there and it is learnt they are using wood by feeling the branches of trees. h. Constructions of houses are going on with eucalyptus (majority) is foundation and structure. i. There is one tube well for water source at the site. j. As per DPR total project cost for the entire project is 36924.69 lakhs and total contribution by the promoter is Rs. 10,017.51 lakhs and Rupee Loan would be cause for Rs. 18998.68 lakhs. Sikaria Divinity (P) Ltd. proposed that project cost & investment would be funded through a mix of equity and debt out of which and amount of Rs. 18998.68 lakhs is proposed to be raised as debt. Except copies of extract of the minutes of the Board meeting dated 13.01.2016 and extract of extra-ordinary General Meeting dated 02.02.2016 nothing else is submitted as to its financial capacity." 7. In addition it was alleged that the petitioner was damaging the environment, did not have the acceptable financial standing, failed to perform their obligatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ep in general and flora and fauna in particular". Their work had "seriously affected the biodiversity of the island and adjoining areas". A proper hygiene standard was not adhered to and so on. ARGUMENTS:- 14. The first point raised by Mr. Mitra for the petitioner was that this termination notice was issued when the application was awaiting consideration of this court for passing an interim order. It was issued to make the application in-fructuous. It was per se bad. 15. Secondly, on 8th March, 2017, the Principal Secretary Tourism Department of the Government of West Bengal had forwarded to the petitioner by letter an agenda of the project to be completed within the next six months. How could the contract be terminated by the Director of Tourism without even referring to even one of the 17 items as not having been completed by the petitioner or not completed to the satisfaction of the government? From time to time by letter dated 12th April, 2017, 29th May, 2017, the petitioner had sent the government and particularly the Principal Secretary a status report showing which portion of the work was completed, what work was in progress and what part of it was required to be done by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely: (i) The building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building of work; (ii) The plaintiff has a substantial interest in the performance of the contract and interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and (iii) The defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed." 19. He said that the scope of the work was specifically defined in the agreement. The petitioner had a substantial interest in the contract by reason of its duration and extent. Compensation in money would not be an adequate relief. 20. Mr. Chowdhury, Additional Government Pleader, for the respondent repeated the contents of the show cause notice and the termination notice stating that the petitioner was making large scale destruction of the environment. Their employees were cutting down the trees. They were used for building cottages and using wood to light fire to cook their food etc. They were also accused of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment on absolutely collateral issues as mentioned above. 23. There was not a single line in this show-cause accusing the petitioner of breach of their obligations under the letter dated 8th March, 2017. Therefore, I take it that the respondent was satisfied with the petitioner's performance of the agreement. 24. Meanwhile, the petitioner on 20th June, 2017 wrote to the District Magistrate, Hooghly that by the end of August, 2017 or the first week of September, 2017 the Hon'ble Chief Minister could be requested to inaugurate the project. On 30th June, 2017 the petitioner replied to the show cause notice as stated above. 25. It does seem quite extraordinary to this court that when there was no earlier allegation against the petitioner that it was damaging the environment, such an allegation could suddenly be raised from June, 2017. Equally, unbelievable appears to be the accusation against them that they were so unfriendly to the environment that the agreement had to be terminated. No documents have been brought on record to show that there was destruction of flora or fauna or the ecology by the petitioner. 26. Furthermore, when on 8th March, 2017 six month's time ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s settled law that in case where damages provide the remedy an interim order of injunction cannot be granted. Conversely in contractual matters only in a suit for specific performance of an agreement could the court grant an order of injunction. This common law principle is well spelt out in Section 41(e) of the Specific Relief Act, 1963. It is also trite that the court will not grant an order of injunction in a contract which is, by its nature determinable, and for breach of which damages are an adequate relief, or in a contract performance of which entails constant supervision by the court or one which runs into minute details. This is so because the court will not order specific performance of such a contract (see Sections 14(1)(a)(b)(c) and (d) of the Specific Relief Act, 1963). 33. Now, consider the following facts. 34. The duration of the contract was stated to be 32 years, renewable for another 32 years. The contract specifically stated that the petitioner would enjoy exclusive possession of the project site with blanket rights of developing the island and making construction thereon and "operating and managing the project". Article 3(4) (see page 120 of the petition) even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been laid down and reiterated by the Supreme Court and the High Courts from time to time. It is only the difference in facts which have resulted in divergent final orders being passed by the court. 38. Let me now deal with the cases cited by Mr. Chowdhury. In Indian Oil Corporation Ltd. v. Amritsar Gas Service and Others reported in (1991) 1 SCC 533, the court was involved with an LPG distributorship agreement granted by Indian Oil Corporation to the respondents. It held that the contract was determinable by nature. A contract is determinable when either party has an option of terminating it giving limited notice to the other party. (See also Rajasthan Breweries Ltd. v. The Stroh Brewery Company reported in 2000 (3) ARBLR 509 (Delhi) cited by Mr. Chowdhury). In those circumstances, the court held that the award made by the arbitrator granting restoration of the distributorship was erroneous in law. The respondents could best be entitled to compensation for loss of earning for the period of notice. Hindustan Petroleum Corporation Limited And Others v. Super Highway Services And Another reported in (2010) 3 SCC 321 arose out of a writ application under Article 226 of the Constitutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ude construction work, landscaping work, beautification work, excavation and so on. SUMMARY OF FINDINGS: 42. Hence, the summary of my findings is as follows:- a) Prima facie, the petitioner is in firm possession. This possession has been granted to them for 32 years, renewable for another 32 years. The petitioner has already started substantial construction work in the island free from all encumbrances. The petitioner's earning was assured by the agreement that they would be able to retain a percentage of the turnover. Therefore, the petitioner was performing works on land and construction of building within the scope of Section 14(iii)(c) of the Specific Relief Act, 1963. b) In the letter of the Principal Secretary Tourism Department dated 8th March, 2017 there was no hint that the respondent was contemplating terminating the contract. Time was extended upto 7th September, 2017 for the petitioner to complete the seventeen items of work mentioned in the annexure to the letter. c) Thereafter, from time to time the petitioner kept the respondent apprised of the progress of the work. By the progress report the petitioner had even expressed the hope that by the end of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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