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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 ..... and that irretrievable injury will be caused to him if the order is denied. It is 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. The termination notice dated 11th July, 2017 is set aside. Ordinarily, the petitioner ought to have been granted time upto 7th September, 2017 to complete the work. Since, this application has been pending in this court for nearly 45 days, the petitioner will get advantage of this period. The respondent is restrained by an order of injunction from terminating the contract till 7th September, 2017 and for a further period of 45 days thereafter. After this period the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project. They had set up the jetty, built roads made available drinking water and power supply to the island. It blamed the petitioner for not starting the work on time and for the delay in proceeding with it. What is most important is that the Principal Secretary granted the petitioner six months' time to complete some pin pointed few basic components of the project, mentioned in the annexure to the letter. In this annexure the following works were specified: 1. The entire place has to be divided into 2 segments (i) Picnic spot on the right side (ii) Cottage on the left side 2. Two/Three common wash room. 3. 20 double bedded room with a dormitory facility separately. 4. Food court for bit high end in segment-(ii) day to day food court in segment--(i) 5. Two watch towers 6. Proper landscaping 7. Display of local hand crafts with artisans. 8. Swimming pool for segment--(ii) 9. Games for both side. 10. New vessel for carry vehicles with jetty in segment--(ii) 11. Path way. 12. Generator facility. 13. Signage on high way 14. Cultural activities area. 15. Parking place for vehicle arriving in island in segment--(ii). 15. Eco friendly vehicle for access to cottage fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damaging the environment, did not have the acceptable financial standing, failed to perform their obligation under Article 6.10(iii) of the agreement, did not maintain a proper office and so on. 8. The notice was stated to be issued under Article 11.4(a)(1) of the agreement asking the petitioner to rectify the alleged breach within thirty days failing which the agreement would be terminated. 9. On 20th June, 2017, without any reference to this show cause notice the petitioner wrote to the District Magistrate, Hooghly that the work was progressing according to the work schedule submitted by the letter dated 12th April, 2017 and that the end of August, 2017 or the first week of September, 2017 could be targeted by him as the possible time for inauguration of the project by the Hon'ble Chief Minister. On 30th June, 2017 the petitioner replied to the show cause notice dated 8th June, 2017, meeting each and every charge levelled in it. According to the petitioner most of the work alleged to have been left undone was the responsibility of the state instrumentalities. An expert had already been appointed by them to monitor the noise level, no worker was cooking any food at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us 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 the government or by the state agencies. According to Learned counsel the government was fully satisfied with the progress of the work done by the petitioner. That is why they did not write a single letter controverting the progress reports submitted by the petitioner or stating that the petitioner was in breach of the contract. 16. It was argued that the show cause notice issued on 8th June, 2017, was extraordinary in the sense that there was no allegation of breach of the agreement by the petitioner. Peripheral issues like soil erosion, absence noise level monitory, absence of embankment, cutting of trees by the workers, financial incapacity of the writ petitioner, absence of a public relation office and complaint register in the project site etc. were raised, calling upon the petitioner to answer the accusation and close the breach failing which the contract would be terminated. 17. It was also said that this letter was replied to by the petitioner 30th June, 2017, dealing with each and every allegation specifying the items of work completed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir 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 making the whole place dirty. The petitioner was unable to prevent soil erosion, preserve the embankment. They did not to have a financial ability to complete the rest of the project. 21. Mr. Chowdhury submitted that this was a contract which could not be ordered by the court to be specifically performed. It was by its nature determinable. In the unlikely event of the petitioner succeeding, they could be compensated by award of damages. The principles on which damages were to be awarded were specified in detail in the contract. If the court granted an order of injunction restraining the respondent from giving effect to the termination notice, it would amount to an order indirectly ordering specific performance of the contract by the respondents. He invited the court's attention to Section 14 of the Specific Relief Act, 1963 and submitted that the contract in question matched the description of the contract in sub-Section (1)(a)(b)(c) and (d) thereof, which according to the Act stipulated they could not be specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 had been given to the petitioner to complete the list of work mentioned in the annexure to that letter, the Director of Tourism could not have terminated that agreement. Particularly, when there was no allegation against them that they were unable to proceed with or complete the seventeen items of work specified by the Principal Secretary. In my opinion, the aspersion on the petitioner that they were damaging or destroying the environment, disturbing the ecological balance, bio-diversity etc. is suspicious. Prima facie the court does not find any evidence in support of it or believe it. 27. Hence, in my prima facie opinion, the petitioner is not and the respondent is in breach of the contract. Prima facie the termination of the contract is wrongful. 28. Is it a case where an injunction should be granted setting aside the notice, terminating the contract, issued by the respondent? 29. The principles governing the grant of an order of injunction are contained in Order 39 Rules 1 2 of the Code of Civil Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 went to the extent of saying that the petitioner would get possession of the island free from all encumbrances, charges etc immediately on execution of the agreement. Such was to be the extent of control of the petitioner that they could demand collect and appropriate charges from the users of the project (see Article 2(2)(d)). It was like an unfettered charter granted to the petitioner, on the island. All these rights the petitioner acquired on payment of an initial amount of Rs. 70 lakhs. They were required to pay an annual concession fee to operate in the island which would increase by 5 % every year. In spite of my best efforts I have not been able to find the annual concession fee payable by the petitioner to the respondent in any conspicuous place of the agreement. 35. Therefore, Mr. Mitra appearing for the petitioner was right when he said that the contract in question came within the exception to the principles laid down in Section 14, provided in sub-section 3(c) thereof. Indeed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Constitution of India. In that case the court held that termination of the dealership agreement by the appellant was wrongful. As we all know in a writ application the court adjudges whether any public law has been violated by the respondent. It passes its orders accordingly. In that case the court held that the action of the appellant was arbitrary, illegal and in violation of the principles of natural justice. Similar was the decision of the Supreme Court in the public law domain in Bharat Petroleum Corporation v. Jagannath and Company and Ors. reported in (2013) 12 SCC 278. This case has no application here as the petitioner has availed of a remedy obtainable on infringement of private law and not public law by approaching this court under Section 9 of the Arbitration and Conciliation Act, 1996. 39. As I have said before, different facts result in different decisions. In Magma Leasing Limited v. Credit Rating Information Services of India Limited reported in (2001) 3 CHN 654, this court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 August or the first week of September this year the project could be inaugurated by the Hon'ble Chief Minister. There is not a single letter of the respondent disagreeing with the progress report furnished by the petitioner. d) There was no whisper from the respondent upto the beginning of June, 2017 that the petitioner was damaging the environment. e) It was only by the show cause notice dated 8th June, 2016 that the petitioner was charged with causing damage to the environment. f) The petitioner explained in detail by their letter dated 30th June, 2017 that they had not damaged the environment. Still, on 11th July, 2017 the contract was terminated alleging damage to the environment by the petitioner. Ironically, no allegation was made that the petitioner was otherwise in breach of the contract. g) Although the Director of the Tourism Department as the concessioning authority had the power to terminate the contract, he ought not to have done it w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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