CLOSE
24 January 2022 | Chetan Iron LLP v. NRC Ltd | Arbitration Petition (L) 1366 of 2022 | GS Kulkarni J | Bombay High Court | 2022 SCC OnLine Bom 159
The Bombay High Court rejected a petition for interim relief in a case that is an excellent example of a contract determinable in its nature and why it cannot be specifically performed.
The parties had a contract for the sale of scrap. Either party could terminate it by giving 15 days’ notice. The petitioner applied for interim relief based on the argument that the respondent would award the contract work to a third party while the contract subsisted. It requested the court for a direction to the respondent to comply with the contract and, pending the final disposal of the petition, grant an injunction from creating any third party rights.
Kulkarni J noted the applicable provisions of the Specific Relief Act, 1963 (“SRA”): Section 14 (d) SRA under which a contract which is in its nature determinable cannot be specifically enforced. Section 41 (e) SRA provides that an injunction cannot be granted to prevent the breach of a contract, the performance of which would not be specifically enforced.
He then noted the rationale behind such a provision (citing commentary) that it would “be idle to do that which might instantly be undone by one of the parties.”
Other reasons given by the court included: Section 42 SRA did not apply, and because the final relief of specific performance could not be granted, a temporary injunction also could not be granted.
At the parties' request, however, the court appointed an arbitrator.
Read the decision here.
On the issue of determinable contracts, read our Highlights on Golden Tobacco & DLF Home (both Delhi High Court, Justice Bakhru), ABP Network (Delhi High Court, Justice C Hari Shankar).
Categories: Appointment of Arbitrators | Contracts Not Specifically Enforceable | Determinable Contract | Injunction To Perform Negative Covenant | Interim Mandatory Injunction | Interim Measures by Court | Mandatory Orders | Negative Covenant | Scope of Section 9 ACA | Section 11 ACA | Section 14 Specific Relief Act | Section 42 Specific Relief Act | Specific Performance | Termination of Contract