High Court
Legal Reasoning
IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADCOMMERCIAL APPEAL NO.1 OF 2023M/s. Ambarwadikar and CompanyThrough its Partner Mr. Suryakant V. Ambarwadikar,Age 52 yrs., Occ. Business,Office at : “Ambarwadikar Complex”,Surya Lawns Complex, Gat No.103,Near Datta Mandir,Beed Bypass Road, Deolai, Aurangabad. … Appellant… Versus …1The State of MaharashtraThrough Secretary,Water Resources Department,Having office at : Mantralaya,Mumbai – 400 032. 2Executive Engineer,Minor Irrigation Division No.1,Having office at : Sinchan Bhavan,Jalna Road, Aurangabad. 3Godavari Marathwada Irrigation DevelopmentCorporation, Through its Executive Director,Office at : Sinchan Bhavan,Jalna Road, Aurangabad. 4Executive Engineer,Godavari Marathwada Irrigation DevelopmentCorporation, Office at : Sinchan Bhavan,Jalna Road, Aurangabad. 5Chief Engineer,Water Resources Department,Office at : Sinchan Bhavan, 2Comm.Appeal_1_2023_JdJalna Road, Aurangabad. 6Superintendent Engineer,Minor Irrigation Division No.1,Office at : Sinchan Bhavan,Jalna Road, Aurangabad. 7Assistant Executive Engineer,Shivna Takali Canal Sub Division No.2,Office at : Sinchan Bhavan, Jalna Road,Aurangabad. 8Assistant Chief Engineer,Aurangabad Irrigation Department,Office at : Sinchan Bhavan,Jalna Road, Aurangabad. 9Superintendent Engineer,Aurangabad Irrigation Division,Office at : Sinchan Bhavan,Jalna Road, Aurangabad. 10Sub Divisional Engineer,Shivna Takali Canal-II,Aurangabad. 11Sub Divisional Engineer,Minor Irrigation Department,Kumbhar Pimplegaon, Post Jalna. 12The Branch Manager,Janata Sahakari Bank Limited, Pune,Opposite Gomtesh Market,Dalalwadi, Durangabad – 431 001. … Respondents...WITHCIVIL APPLICATION NO.13953 OF 2023 IN COMAP/1/2023
Legal Reasoning
3Comm.Appeal_1_2023_JdWITHCIVIL APPLICATION NO.13954 OF 2023 IN COMAP/1/2023WITHCIVIL APPLICATION NO.13955 OF 2023 IN COMAP/1/2023WITHCIVIL APPLICATION NO.14280 OF 2023 IN COMAP/1/2023 WITHCIVIL APPLICATION NO.14803 OF 2023 IN COMAP/1/2023WITHCIVIL APPLICATION NO.677 OF 2024 IN COMAP/1/2023...Mr. R.F. Totala, Advocate h/f Mr. Ganesh Yadav and Swapnil Lohiya,Advocates for appellant/applicant in COMAP/1/2023, CA/13953/2023,CA/13954/2023, CA/13955/2023 and CA/14280/2023Mr. K.T. Taur and Mr. V.A. Bagal Patil, Advocates for applicant inCA/14803/2023Mr. S.S. Nade, Advocate for applicant in CA/677/2024Mr. Mr. N.S. Tekale, AGP for respondent No.1Mr. S.V. Adwant, Advocate h/f Mr. A.A. Yadkikar and Mr. Akshay Kulkarni,Advocates for respondent Nos.2 to 11Mr. S.V. Natu, Advocate for respondent No.12...CORAM :SMT. VIBHA KANKANWADI & S.G. CHAPALGAONKAR, JJ. RESERVED ON:24th JANUARY, 2024PRONOUNCED ON :08th FEBRUARY, 2024 4Comm.Appeal_1_2023_JdJUDGMENT : ( PER : SMT. VIBHA KANAKANWADI, J.)1Present appeal has been filed by original plaintiff to challengecommon order below Exhs.5, 6 and 7 dated 01.11.2023 by CommercialCourt/District Judge-2, Aurangabad in Commercial Suit No.1/2023, therebyrejecting all the applications. (Hereinafter parties are referred as they werebefore the trial Court, for the sake of convenience.) 2The original plaintiff is a registered Partnership Firm engaged inbusiness of infrastructure. The plaintiff has executed various Governmentprojects. Defendant No.2 had floated a tender in 2010 for the work i.e.construction of Earthwork Lining and Structures of Canal No.1 andDistribution System of Brahmagavan Lift Irrigation Scheme Part-II, Tq.Paithan, Dist. Aurangabad for estimated costs of Rs.4,494.86 lakhs. Plaintiffparticipated in the tender process and its bid was accepted. The plaintiff haddeposited an amount of Rs.30,00,000/- and also given bank guarantee ofRs.82,40,000/- of Janata Sahakari Bank Limited in pursuant to the tendercontract. It is the contention of the plaintiff that it was the duty of thedefendants to see that all the land is made available to the plaintiff forcarrying out the work. Upon the measurement of the work done and itsverification the defendant authorities released part payment of Rs.18.32 5Comm.Appeal_1_2023_JdCrores to the plaintiff. Defendant No.2 had issued letter dated 31.10.2017stating that the progress of the work is slow and levied fine/penalty on theplaintiff @ Rs.25,000/- per day till further orders. There was reference of thesaid penalty in letter 15.02.2020 issued by defendant No.2 and allegationthat the plaintiff had sub-let the project work and informed that a meeting isscheduled on 18.02.2020 and asked it to remain present. The plaintiff hadwritten a letter on 18.06.2019 that about 11 farmers are obstructing theprogress of the work on the ground that their lands have not been acquired.According to the plaintiff, the possession of part of the land is not given bydefendant No.2 to it and, therefore, the progress could not be made. Timeand again, there was communication in respect of removal of the obstruction,however, there was no positive response. Approximately, 90% work iscomplete. Allegations have been levelled against the Engineers to misguidethe higher authorities. Then it is stated that the plaintiff was shocked to seeletter dated 15.05.2020 issued by defendant No.6 to defendant No.3 that theremaining work has been got completed through another contractor Mr. A.M.Ambhore from Jalna. Amount of Rs.3,25,14,000/- was demanded for makingnecessary payments. Plaintiff raised protest by letter dated 18.05.2020stating that no such work has been done by the said contractor and,therefore, no bill is required to be raised. Legal notice was also issued by theplaintiff on 23.05.2020 and reminder on 12.06.2020. Plaintiff had then 6Comm.Appeal_1_2023_Jdrequested to extend the time for completion up to 31.07.2022. TheSuperintendent Engineer and Executive Engineer by giving reference to theplaintiff’s letter opined that it is appropriate to get the work done from theplaintiff. Action of imposing penalty should be reviewed, was the stand takenby them. By letter dated 14.08.2020 the Chief Engineer accepted thatproposal in the name of other contractor has not been sanctioned. It is thenstated that there were various communications between the plaintiff and thedefendants and the defendant (Superintending Engineer) by letter dated03.12.2020 asked the plaintiff to submit documents and papers in relation tosub-letting contract. In the meantime, letter for extension was submitted.Plaintiff undertook that he would complete the work within two years.Plaintiff had then issued letter to defendant No.5 on 22.04.2021 andsubmitted copy of registered deed of cancellation executed between him andSahas Engineers and Contractors Private Limited. Plaintiff says that thedefendants are unnecessarily harassing with mala fide intention. He had alsoapproached this Court in Writ Petition No.7036 of 2021. This Court gaveliberty to file suit to the plaintiff by order dated 26.07.2022 and disposed ofthe writ petition. The action of the defendants is illegal and threatening toterminate the contract. Therefore, for various reliefs the suit was filed. 3Plaintiff filed application Exh.5 for temporary injunction for 7Comm.Appeal_1_2023_Jdvarious reliefs which will be dealt with at a later point of time. Thereafter,application Exh.6 was filed for mandatory injunction directing the defendantsto make payment of Rs.3,00,75,900/-. An application Exh.7 was filed forstay of communication dated 06.01.2023, whereby it was informed that thecontract in favour of plaintiff has been cancelled. 4The defendants have filed their say. The say of defendant Nos.2to 11 is at Exh.33. It has been mainly stated that the claim of the plaintiffwas within the exception carved out under Section 41 of the Specific ReliefAct and, therefore, it is thoroughly unsustainable at law. Final relief cannotbe claimed by plaintiff in the nature of interim relief. The facts are disputed.Defendant Nos.2 to 11 are the officers of Godavari Marathwada IrrigationDevelopment Corporation, which had granted the tender to the plaintiff. Theplaintiff has not done the work within stipulated time and, therefore, it istheir duty to get the remaining work done and to see that there is no breachof terms of contract. No prima facie case has been shown by the plaintiff norirreparable loss. 5After hearing both sides and perusing the documents on recordthe learned Judge of the Commercial Court at Aurangabad rejected all theapplications. Hence, the present appeal. 8Comm.Appeal_1_2023_Jd6Heard learned Advocate Mr. R.F. Totala holding for learnedAdvocates Mr. Ganesh Yadav and Swapnil Lohiya for appellant/applicant inCommercial Appeal No.1 of 2023, Civil Application Nos.13953 of 2023,13954 of 2023, 13955 of 2023 and 14280 of 2023, learned Advocates Mr.K.T. Taur and Mr. V.A. Bagal Patil for applicant in Civil Application No.14803of 2023, learned Advocate Mr. S.S. Nade for applicant in Civil ApplicationNo.677 of 2024, learned AGP Mr. Mr. N.S. Tekale for respondent No.1,learned Advocate Mr. S.V. Adwant holding for learned Advocates Mr. A.A.Yadkikar and Mr. Akshay Kulkarni for respondent Nos.2 to 11 and learnedAdvocate Mr. S.V. Natu for respondent No.12. 7At the outset, without going into the details as to whether onlyone appeal can lie for a common order for three differentexhibits/applications, we would like to deal with the matter as the mainpoint that would be required to be considered would be – As to whether theplaintiff had shown prima facie case, irreparable loss would be caused to theplaintiff and balance of convenience lies in favour of plaintiff ? Anyapplication under Order XXXIX Rule 1, 2 of the Code of Civil Procedure, 1908requires these three factors to be considered by any Court. Suffice it to saythat merely because a common order is passed, a party does not get a right tochallenge it by way of filing only one appeal. 9Comm.Appeal_1_2023_Jd8Learned Advocate for the plaintiff has taken us through thetender documents, the terms therein and the various communicationsbetween the plaintiff and defendant No.3. The fact is not in dispute that theplaintiff was given the said contract, as for the said tender i.e. construction ofEarthwork Lining and structure of Canal No.1 and Distribution System ofBrahmagavan Lift Irrigation Scheme Part-II, Tq. Paithan, Dist. Aurangabad,the project was to be completed within 36 months from 25.10.2010.According to the plaintiff, as the defendant has not given possession of part ofthe land due to the agitation by certain land owners, who had dispute inrespect of land acquisition, he has got the extension to the said project.There is no dispute between both the parties that it is a commercial litigation,as it is in respect of infrastructure project. As regards the infrastructureprojects are concerned, it is well settled that preference has to be given tosuch projects. At this stage, we are considering, whether the plaintiff isentitled to the interim relief and, therefore, to that extent only we are takingnote of the submissions by the parties. 9The plaintiff himself has now produced on record letter dated06.01.2023 issued by Executive Engineer, thereby terminating the contract.The suit has been filed on 02.01.2023. Thereafter, it appears thatamendment has been carried out in February, 2023. Therefore, as on today 10Comm.Appeal_1_2023_Jdwe are required to consider what has been prayed in the suit. No freshapplication under Order XXXIX Rule 1, 2 of the Code of Civil Procedure wasfiled, but the old application Exhs.5, 6 and 7 it appears to have been pressedinto service. 10In the light of those facts the learned Advocate for theplaintiff/appellant submits that the act of terminating the contract wasillegal, as there was no breach of terms of contract by the plaintiff.Defendant No.3 had not handed over certain portion of the land and in spiteof the communications no action was taken. Rather illegally, penalty ofRs.25,000/- per day was imposed by order dated 01.11.2017. The saidletter/order imposing the penalty was by the Executive Engineer, who had noauthority or power to impose the said penalty. The penalty even imposed bythe Superintending Engineer, who is superior to the Executive Engineer. Thedefendants at one hand are saying that the remaining work has been gotcompleted through another contractor; yet, in view of the lattercommunication between the defendants and the plaintiff it can be seen thatthe work has not been got completed. Therefore, the defendants cannot beallowed to terminate the contract and allotting the remaining work to anythird person. Even the bank guarantee should not have been encashed. Thebill of the work done by the plaintiff has been approved by the defendants, 11Comm.Appeal_1_2023_Jdbut it has been unnecessarily and illegally withheld by the defendants. Theplaintiff has apprehension that they would deduct the penalty amount fromthe said amount. All these facts have not been considered by the learned trialJudge. A cryptic order has been passed saying that in view of amendmentthe application has become infructuous. The appeal, therefore, deserves tobe allowed. 11Learned Advocate for the plaintiff has relied on following caselaws : 1)Katta Sujatha Reddy and another vs. Siddamsetty Infra ProjectsPrivate Limited and others [(2023) 1 SCC 355] with companionmatters,2)Narendra Hirawat and Co. vs. Sholay Media Entertainment Pvt.Ltd. and another [2020 SCC OnLine Bom. 391],3)The Divisional Engineer (Highways), Construction andMaintenance Division, Kallakurichi and others vs. C. SaravananChandrasekaran in A.S. No.83 of 2017 decided on 31.03.2021 bySingle Bench of Madras High Court, and4)Copy of order dated 15.01.2024 passed in Contempt PetitionNo.955 of 2023 [Ambarwadikar and Company, Through its PartnerSuryakant Vitthalrao Ambarwadikar vs. Secretary, Water ResourcesDepartment] by this Court. 12Per contra, the learned Advocate Mr. S.V. Adwant holding for 12Comm.Appeal_1_2023_Jdlearned Advocates Mr. A.A. Yadkikar and Mr. Akshay Kulkarni submitted thatin the present case Section 39 and 41 of the Specific Relief Act are requiredto be read together as they supplement each other. When alternateefficacious remedy is available to the plaintiff, injunction cannot be granted.The contract that was entered into between the plaintiff and defendant No.3was a determinable contract. The plaintiff can file a suit for specificperformance, but not in the way the present suit is filed, wherein there is norelief is sought for specific performance. Section 20A of the Specific ReliefAct ensures that infrastructure projects are not to be delayed on account ofpendency of Court proceedings and, therefore, the learned trial Court hadrightly refused the injunction. The plaintiff himself had breached the termsof contract when he had sub-let to get the work done from another contract.That contract itself was in derogation to a term which he agreed in thepresent tender contract, thereby the plaintiff has not come with a cleanhands. With the termination of the contract the plaintiff cannot seekprevention of breach of a contract. 13The learned Advocate for respondent Nos.2 to 11 has relied onfollowing case laws :1)B. Santoshamma and another vs. D. Sarala and another[(2020) 19 SCC 80], 13Comm.Appeal_1_2023_Jd2)Katta Sujatha Reddy and another vs. Siddamsetty Infra ProjectsPrivate Limited and others [(2023) 1 SCC 355] with companionmatters,3)Wander Limited and another vs. Antox India Private Limited[1990 (Supp) SCC 727],4)Indian Oil Corporation Ltd. vs. Amritsar Gas Service and others[(1991) 1 SCC 533],5)Channel Motors vs. Skoda Auto Volkswagen India PrivateLimited in Arbitration Appeal (Stamp) No.23325 of 2020 decided on09.12.2020 by Single Bench of this Court,6)Oil and Natural Gas Corporation Ltd., Mumbai vs. M/s.Streamline Shipping Co. Pvt. Ltd. [2002 (3) Mh.L.J. 530],7)Rajasthan Breweries Limited vs. The Stroh Brewery Company[2000 SCC OnLine Delhi page 481],8)Turnaround Logistics Pvt. Ltd. vs. Jet Airways (India) Ltd. andothers [2007 SCC OnLine Del 2085] and9)Inter Ads Exhibition Pvt. Ltd. vs. Busworld InternationalCooperative Vennootschap Met Beperkte Anasprakelijkheid [2020SCC OnLine Del 351].14As aforesaid, taking into consideration the rival contentionsfollowing points arise for determination, findings and reasons for the sameare as follows. 14Comm.Appeal_1_2023_JdSr. Nos.POINTSFINDINGS01Whether the plaintiff had shown primafacie case ?No.02To whom irreparable loss would becaused upon the grant of relief thanrefusing ?Defendant No.3.03In whose favour the balance ofconvenience lies ?Defendant No.3.REASONSPoint Nos.1 to 3 :15To avoid the repetition all the points are taken up together. Asaforesaid, though the suit has been amended after the alleged letter oftermination of contract dated 06.01.2023, there was no amendment or freshapplication Exh.5/Order XXXIX Rule 1, 2 of the Code of Civil Procedureapplication and, therefore, we have to consider what were the prayers in theearlier application Exh.5. We would like to deal with it one by one. Theprayer clause 59-b) reads thus - “b)Temporary injunction be granted, against the Defendants, theirservants, agents or any person claiming through them, restrainingthem from terminating the contract dated 25.10.2010 and allottingthe same to any third party till decision of the suit.” 15Comm.Appeal_1_2023_Jd16As aforesaid, already the letter of terminating the contract hasbeen issued on 06.01.2023. In view of the said letter following relief hasbeen added in the main suit - “61 – b) It be declared that office order no.337/2017 dated 31stOctober, 2017 imposing cost of Rs.25,000/- per day, is null and voidand contrary to the tender conditions.bb)That, it be declared that cancellation of tender communicatedvide letter dated 06.01.2023 by Defendant No.2 is null and void and bequashed.”A specific question was, therefore, asked to the learned Advocatefor the plaintiff – As to whether the plaintiff is accepting that the tender iscancelled ? We certainly, at this prima facie stage, accept the contention onbehalf of the respondent that the contract that was entered into on the basisof tender was determinable, of course, it was on conditions. If thecancellation of the contract is admitted, then the further reliefs can bemoulded. But when the fact has come on record that there is termination ofthe contract dated 25.10.2010, no question of granting any temporaryinjunction as prayed aforesaid will arise. 17Now, we will deal with prayer clause 59-c) which reads thus - “c)Temporary injunction be granted against the Defendants, theirservants, agents or any person claiming through them, restraining 16Comm.Appeal_1_2023_Jdthem from invoking the bank guarantee of an amount ofRs.82,40,000/- of Janata Sahakari Bank Limited, Pune.”In this respect what has come on record is, as common orderbelow application Exhs.23 and 29 in the suit that defendant No.12 had filedpursis at Exh.27 and informed that as per letter dated 13.01.2023 the bankguarantee of Rs.82,40,000/- already honoured and the amount has beentransferred to Executive Engineer and, therefore, it appears that the learnedtrial Judge has said that the said relief has become infructuous. 18So far as prayer clause 59-d) is concerned, which reads thus - “d)Temporary injunction be granted against the Defendants, theirservants, agents or any person claiming through them, restrainingthem not to deduct an amount of Rs.25,000/- as per office orderno.337/2017 dated 31st October, 2017 from the payment to be madeto the plaintiff for the work done and approved by the defendants i.e.Rs.3,00,75,900/- (Rupees Three Crore Seventy Five Thousand NineHundred only).”It is to be noted that impugned order is said to have been passedon 31.10.2017 or 01.11.2017 regarding imposing penalty of Rs.25,000/- perday. It can be seen that the said order was never challenged by the plaintiffand, therefore, the said prayer suffers from delay and laches. 19The next prayer clause 59-e) reads thus - 17Comm.Appeal_1_2023_Jd“e)Temporary injunction be granted against the Defendants, theirservants, agents or any person claiming through them, restrainingthem not to carry the measurement as alleged in letter dated27.12.2022 as the measurement was already carried and its bill is alsoapproved.”Prayer clause e) cannot be granted on the ground that when thecontract is terminated for raising final bill, measurement will have to bedone. Therefore, it is then related to the letter dated 06.01.2023 and at thecost of repetition it is said that the plaintiff will have to accept the saidcancellation and mould the prayers accordingly. 20This can be considered from another angle also. The recordshows that there was a specific condition that the plaintiff should not sub-letthe contract and get the contract executed through another agency. Still theplaintiff accepts that he had engaged another agency, thereby sub-letting thecontract. No doubt, thereafter he has cancelled the said contract when theinquiry was started. Therefore, certainly, at this prima facie stage, it can besaid that the plaintiff has not come with clean hands. 21The main objection now appears to be in respect of the fact thatdefendant has not made available the entire land on which the work was tobe done and there was hurdle raised by the farmers. In this respect theanswer can be found only after the full-fledged trial. Whether it was 18Comm.Appeal_1_2023_Jdsufficient for the plaintiff only to bring the said objection to the notice of thedefendant authority, would be a question. Therefore, taking intoconsideration all these aspects, we hold that the plaintiff has failed to proveprima facie case. Plaintiff will not suffer irreparable loss. Rather defendantNo.3 would suffer irreparable loss, if the injunction is granted as it is acommercial suit. The balance of convenience lies in favour of defendantNo.3. We, therefore, do not find any illegality or error committed by thelearned trial Judge in rejecting application Exh.5. As aforesaid, applicationExh.6 was for mandatory injunction, which appears to be the relief in themain suit also and, therefore, it cannot be granted, which is in respect ofrecovery of money. In respect of application Exh.7 for stay to thecommunication dated 06.01.2023 also it is the main relief in the amendedplaint and, therefore, it cannot be granted by way of back door entry. 22The legal position in all the decisions relied by both the partiescannot be disputed, however, taking into consideration the facts those arerequired to be applied. Therefore, the appeal deserves to be dismissed. CivilApplication No.13953 of 2023, Civil Application No.13954 of 2023 and CivilApplication No.13955 of 2023 are for interim injunction and Civil ApplicationNo.14280 of 2023 is for stay. All deserves to be dismissed. Civil ApplicationNo.14803 of 2023 and Civil Application No.677 of 2024 are stated to be for 19Comm.Appeal_1_2023_Jdintervention by third party, who want to get themselves added as partyrespondents to the appeal. The first and the foremost fact to be noted is thatit is a commercial appeal and the said applicants were not party respondentsbefore the trial Court. They had not approached the trial Court under Order IRule 10 of the Code of Civil Procedure. Therefore, their applications styledas “intervention application” cannot be allowed. These applications deserveto be rejected. Hence, the following order. ORDER1The Commercial Appeal stands dismissed. 2All the civil applications for injunction/stay, i.e. Civil ApplicationNos.13953 of 2023, 13954 of 2023, 13955 of 2023 and 14280 of 2023 standdismissed. 3 Civil Application Nos.14803 of 2023 and 677 of 2024 forintervention also stand dismissed. ( S.G. CHAPALGAONKAR, J. ) ( SMT. VIBHA KANKANWADI, J. ) 20Comm.Appeal_1_2023_JdDate : 08.02.2024Later on :23After the pronouncement of the Judgment, learned Advocate forthe plaintiff/appellant seeks extension of interim relief for four weeks whichwas in existence for more than one year. 24We have concluded that the plaintiff had not shown the primafacie case nor the balance of convenience lies in favour of the plaintiff.Under such circumstance, no case is made out for extension of the interimrelief. Hence, oral request is rejected. ( S.G. CHAPALGAONKAR, J. ) ( SMT. VIBHA KANKANWADI, J. ) agd