IN THE HIGH COURT OF BOMBAY AT GOA **** APPEAL FROM ORDER NO. 49 OF 2003 1. M/s. Timblo Mineral Private Limited, a Company incorporated under the Companies Act, 1956 (Act 1 of 1956), having its registered office at Kadar Manzil, P.B. No.34, Margao, Goa, 403 601, and 2. M/s. Timblo Private Limited, a company incorporated under the Companies Act, 1956 (Act 1 of 1956), having its registered office at Kadar Manzil, Post No.34, Margao, Goa. ...Appellants. Versus 1. M/s Hardesh Ores Private Limited, a Company incorpor- ated under the Companies Act, 1956 (Act 1 of 1956), having its registrered office at Vila Flores de Silva Erasmo Carvalho Street, Margao, Goa, 403 001, 2. M/s. Sociedade De Fomento Industrial Private Limited, a Company incorporated under the Companies Act, 1956 (Act 1 of 1956), having its registered office at Vila Flores da Silva, Erasmo Carvalho Street, Margao-Goa-403 601, and 3. Shri Ramakant Rajaram Painguinkar, major of age, r/o Shri Damodar Co-operative Housing Society, Building No.2, Flat No.1, Aquem, Margao - Goa - 403 601. ...Respondents. Shri V. A. Bobde, Senior Advocate with Shri M. S. Sonak, and Ms. Pooja Bharne, advocates for the appellants. Shri B. R. Zaiwalla, Senior Advocate with Shri Sudesh Usgaokar, advocate for respondent no.1. - 2 - Shri M. S. Usgaokar, Senior Advocate with Shri Sudesh Usgaokar, advocate for respondent no.2. Shri A. N. S. Nadkarni, Advocate General with Shri N. A. Takekar and Shri D. Lawande, advocates for respondent no.3. CORAM : R. J. KOCHAR, J. DATE : 5th September, 2003. ORAL JUDGMENT Appeal is admitted and by consent of the parties, heard finally. 2. The appellants are the original plaintiffs, who are aggrieved by the impugned Order passed by the learned Trial Court on 2nd August, 2003, vacating the ex-parte injunction order and refusing to confirm the same in their favour in the application for temporary injunction under Order 39 Rules 1, 2 and 3 of the Civil Procedure Code, which thereby stood dismissed. 3. Considering the volume of the paper book, I thought it proper to hear the Appeal From Order finally instead of hearing the same for interim orders, to avoid wasting of valuable time of the Court, as generally in such contentious litigation both the sides do take the Court through the entire proceedings. I have, therefore, heard the learned counsel on both the sides extensively and both have taken me through the voluminous documents and have indeed made exhaustive submissions to the best of their ability. Both the sides have also cited an umpteen number of judgments to buttress their respective view points in the matter. Both - 3 - the sides have made their submissions as if I would be deciding the whole suit finally. 4. Parties would be described by me as the plaintiffs and the defendants in the original proceedings, for the sake of convenience. 5. The facts and the controversy between the parties can be briefly narrated as below and to the extent of relevance, to decide the issue of grant of temporary injunction to the plaintiffs during the pendency of the suit and until its final disposal. I have, therefore, thought it proper not to delve deep in the mine of the parties to excavate the irrelevant iron ore of facts as done on both the sides and, in particular, the defendant no.1. There is no dispute that the defendant no.3 is the owner of the mine. There is also no dispute that the plaintiffs no.1 have a written contract with the defendant no.3 signed on 16th June, 2003, to carry out the work of raising and extracting the ore from the suit mine of the defendant no.3. There is also no dispute that earlier there was a written contract for the same purpose of raising and extracting the ore from the suit mine between the defendant no.1 and the defendant no.3 and an agreement to sell the raised ore between the defendant no.2 and the defendant no.3. The first of such Agreements was entered into between the - 4 - parties on 17th December, 1984 and it was initially for a period of nine years to be renewed for another span of nine years duration or such lesser period. The option to renew was left to the defendant no.1, on the same terms and conditions. This Agreement was to expire on 16th December, 1993, as per its Clause 1. The Agreement stipulated several other terms and conditions including a stipulation that: " The First Party solemnly declared that at the commencement of this Agreement there does not exist any contract with anyone else for raising and transporting ore from the said Mining Concession and agrees that during the tenure of this agreement it will not appoint any other contractor for raising and/or transporting ore from the said Mining Concession and the Second Party shall be the sole and the only contractor for raising, transporting and weighing ore from the said Mining Concession during the period of this agreement." This Clause should be read with Clause 1, which is as under:- "1. This Agreement shall come into force on the 17th day of December, 1984 and shall remain in force for a period of 9 (nine) years upto 16th December 1993, with option to the Second Party to renew the same for further any number of such periods of equal or less duration on the same terms and conditions." 6. There is also no serious dispute that the defendant no.1 has not specifically exercised its option to renew the Agreement for nine years from December, 1993, or for any duration. There is also no serious dispute that thereafter both the parties carried on and continued the work - 5 - annually upto 31st December, 2002 and thereafter monthly upto 31st May, 2003, with a small variation or rise in the amount of royalty payable by the defendant no.1. 7. Shri Vinod Bobde, the learned Senior Counsel for the plaintiffs and Shri A.N.S. Nadkarni, the learned Advocate General for the private party, defendant no.3, both have assailed the impugned Order with equal vehemence. Both have severely criticised the approach of the Trial Court in deciding the temporary injunction application. According to them, there was no specific written renewal of the 1984 Agreement for nine years and thereafter for nine years again. Both have submitted that the defendant no.1 never exercised in writing and expressly the option to renew the 1984 Agreement though the working arrangement continued annually and monthly. Shri Nadkarni pointed out that the vouchers were prepared by the defendant no.1 and he mentioned whatever he wanted and that his client signed the same as he was in dire need of money for the treatment of his son who was suffering from the dreaded disease of cancer. He submitted that no inference of renewal of a written contract can be drawn from such weak and fortuitous circumstances and that there was nothing on record to get an express exercise of the option to renew the 1984 Agreement upto 2011 as contended. 8. Shri Bobde, the learned Senior Counsel further criticised the Order of the Trial Court for holding that the - 6 - defendant no.1 was in "lawful possession" of the mine, as in fact he was only allowed to enter the mine for the purpose of raising the ore and, in fact, defendant no.3, the owner, had never given to the defendant no. exclusive possession of the mine, but a licence to carry out the term of the Agreement. His entry cannot be called his possession of the mine says Shri Nadkarni. He further submits that his client was lawfully justified in entering into a fresh agreement with the plaintiff no.1 and that there was no bar under the 1984 Agreement which stood expired in 1993 and what arrangement continued between them was not an Agreement, but an ad-hoc arrangement annual and monthly. The bar under Clause 15 had come to an end in 1993 itself. Shri Nadkarni further submitted that the status of the defendant no.1 was that of a Contractor under the Agreement and, therefore, the Contractor cannot prevent the Principal from doing the activity himself. The right of such a Contractor at the most can be to file a suit for damages and nothing more for breach of the Agreement as alleged. Both the learned counsel have relied on the following authorities in suport of their submissions:- 1. Associated Associated Associated Hotels of India Ltd. vs. R. N. Hotels of India Ltd. vs. R. N. Hotels of India Ltd. vs. R. N. Kapoor Kapoor Kapoor, AIR 1959 SC 1262, 2. Chief Chief Chief Inspector of Mines & Anr. etc. vs. Inspector of Mines & Anr. etc. vs. Inspector of Mines & Anr. etc. vs. Karam Karam Karam Chand Thapar, etc. Chand Thapar, etc. Chand Thapar, etc., AIR 1961 SC 838, 3. Chikkam Chikkam Chikkam Koteswara Rao vs. Chikkam Subbartao & Koteswara Rao vs. Chikkam Subbartao & Koteswara Rao vs. Chikkam Subbartao & Ors. Ors. Ors., AIR 1971 SC 1542, 4. The The The State of West Bengal vs. Shebaits of State of West Bengal vs. Shebaits of State of West Bengal vs. Shebaits of Iswar Iswar Iswar Sri Saradia Thakurani & Ors. Sri Saradia Thakurani & Ors. Sri Saradia Thakurani & Ors., (1972) 4 SCC 158, - 7 - 5. American American American Dyanamid Co. vs. Ethicon Ltd. Dyanamid Co. vs. Ethicon Ltd. Dyanamid Co. vs. Ethicon Ltd., 1975 (1) All ER 504, 6. Industrial Industrial Industrial Supplies Pvt. Ltd. & Anr. vs. Supplies Pvt. Ltd. & Anr. vs. Supplies Pvt. Ltd. & Anr. vs. Union Union Union of India & Ors. of India & Ors. of India & Ors., AIR 1980 SC 1858, 7. Central Central Central Inland Water Trransport Corporation Inland Water Trransport Corporation Inland Water Trransport Corporation Ltd. Ltd. Ltd. & Anr. vs. Brojo Nath Ganguly & Anr. & Anr. vs. Brojo Nath Ganguly & Anr. & Anr. vs. Brojo Nath Ganguly & Anr., (1986) 3 SCC 156, 8. Goodyear Goodyear Goodyear India ltd. & Ors. vs. State of India ltd. & Ors. vs. State of India ltd. & Ors. vs. State of Haryana Haryana Haryana & Anr. & Anr. & Anr., (1990) 2 SCC 71, and 9. Geetabala Geetabala Geetabala Manohar Naik Parulekar vs. Manohar Naik Parulekar vs. Manohar Naik Parulekar vs. Salgaocar Salgaocar Salgaocar Mining Industries Ltd. & Ors. Mining Industries Ltd. & Ors. Mining Industries Ltd. & Ors. (Appeal From Order No. 40 of 1993 decided on 30th September, 1996). There are a few vouchers or receipts for payments made by defendant no.1 to the defendant no.3 and there is some other correspondence between the parties on the basis of which the learned Senior Counsel, Shri Zaiwalla, has very vehemently submitted that we should infer from these facts and the letters that by implication the agreement was renewed for the second term of nine years upto December, 2002 and thereafter upto December 2011. According to the learned counsel, these are the established circumstances to draw an inference of renewal of the First Agreement for the subsequent two terms of nine years each, upto 2011 and, therefore, according to him, the defendant no. 3 had no right to enter into any agreement with the plaintiff no.1 for the purpose of raising ore from the suit mine. Shri Zaiwalla, therefore, justified the act of his client to obstruct the entry of the plaintiffs on the suit mine, which was in the "lawful possession" of the defendant no.1 under the impliedly extended or renewed Agreement. He has, - 8 - therefore, vehemently justified all the actions taken by the defendant no.1 to prevent the entry of the plaintiff no.1 in the suit mine under the garb of the Agreement dated 16th June, 2003, with the defendant no.3. He pointed out from the vouchers signed by the defendant no.3 and other documents that by implication the Agreement of 1984 stood implicitly renewed for the third term of nine years, upto 2011 and, therefore, according to him, the alleged Agreement between the plaintiff no.1 and the defendant no.3 is in breach of the "existing" Agreement. He has, therefore, vehemently supported the impugned Order passed by the Trial Court. The learned counsel has cited the following authorities, including extracts from the learned Authors Pollock and Mulla on Indian Contract and Specific Relief Acts and Lord Denning’s "The Closing Chapter":- 1. Kishori Kishori Kishori Lal vs. Mt. Chaltibai, Lal vs. Mt. Chaltibai, Lal vs. Mt. Chaltibai, AIR 1959 SC 504, 2. Narayan Narayan Narayan Bhagwantrao Gosavi Balajiwale vs. Bhagwantrao Gosavi Balajiwale vs. Bhagwantrao Gosavi Balajiwale vs. Gopal Gopal Gopal Vinayak Gosavi & Ors. Vinayak Gosavi & Ors. Vinayak Gosavi & Ors., AIR 1960 SC 100, 3. Gardner Gardner Gardner vs. Blaxill & Anr. vs. Blaxill & Anr. vs. Blaxill & Anr., (1960) 2 All ER 457, 4. London London London Borough of Hounslow v. Twickenham Borough of Hounslow v. Twickenham Borough of Hounslow v. Twickenham Garden Garden Garden Developments Ltd. Developments Ltd. Developments Ltd.,(1970)3 All ER 326, 5. R. R. R. Kempraj vs. M/s Burton Son & Co. Kempraj vs. M/s Burton Son & Co. Kempraj vs. M/s Burton Son & Co. Pvt. Pvt. Pvt. Ltd., Ltd., Ltd., AIR 1970 SC 1872, 6. Panjumal Panjumal Panjumal Hassomal Advani vs. Harpal Singh Hassomal Advani vs. Harpal Singh Hassomal Advani vs. Harpal Singh Abnashi Abnashi Abnashi Singh Sawhney & Ors. Singh Sawhney & Ors. Singh Sawhney & Ors., AIR 1975 Bom.120, 7. Ram Ram Ram Bilas Ojha & Ors. vs. Bishwa Muni & Bilas Ojha & Ors. vs. Bishwa Muni & Bilas Ojha & Ors. vs. Bishwa Muni & Ors., Ors., Ors., AIR 1978 SC 1094, - 9 - 8. Wander Wander Wander Ltd. & Anr. vs. Antox India P. Ltd. & Anr. vs. Antox India P. Ltd. & Anr. vs. Antox India P. Ltd. Ltd. Ltd., 1990 (Supp) SC 727, 9. Shiv Shiv Shiv Kumar Chadha vs. Municipal Kumar Chadha vs. Municipal Kumar Chadha vs. Municipal Corporation Corporation Corporation of Delhi & Ors. of Delhi & Ors. of Delhi & Ors., (1993) 3 SCC 161, 10. Pullock & Mulla on Indian Contract and Indian Contract and Indian Contract and Specific Specific Specific Relief Acts Relief Acts Relief Acts, Twelfth Edition, 1, pg. 23, 11. The The The Closing Chapter Closing Chapter Closing Chapter, by the Rt. Hon. Lord Denning, pg. 258. 9. Shri Usgaokar, learned Senior Counsel appearing for the respondent no.2/defendant no.2, has briefly submitted that the suit itself was not maintainable and, therefore, there was no case for interim relief to be granted to the plaintiffs. According to learned Senior Counsel, if the suit itself is not maintainable, there is no question of granting any interim orders to the plaintiffs. He has relied on a Judgment of the Supreme Court in support of the said proposition of law in the case of Cotton Corporation of India Cotton Corporation of India Cotton Corporation of India Ltd. vs. United Industrial Bank Ltd. & Ors., AIR 1983 S.C. Ltd. vs. United Industrial Bank Ltd. & Ors., AIR 1983 S.C. Ltd. vs. United Industrial Bank Ltd. & Ors., AIR 1983 S.C. 1272 1272 1272. He further submits that since there was no relief against the defendant no.3, it was a case of mis-joinder of a party. The defendant no.3 ought not to have been joined in the suit and there was no cause of action which arose for the plaintiffs against the defendant no.3 to have filed the present suit against the defendant no.3. He relied on Section 38(3) of the Specific Relief Act, 1963, to buttress his aforesaid submission. Shri Usgaokar further tried to submit that the Agreements entered into by the defendant no.1 and the defendant no.2 with the defendant no.3 were composite agreements and were mutually interdependent. Shri Usgaokar - 10 - pointed out that the Agreement between the defendant no.3 and the defendant no.1 was for raising and extracting of the iron ore from the mine owned by the defendant no.3 and thereafter the defendant no.2 stepped on scene as the defendant no.3 had entered into another Agreement with the defendant no.2 for sale of the said iron ore extracted by the defendant no.1 from the mine of the defendant no.3. Shri Usgaokar, therefore, termed both these agreements as composite agreements or transactions. He also submits that the defendant no. 1 and the defendant no.2 are sister concerns. He admits the position that the Managing Director of the defendant no.2 is the main decision-taking authority for both the sister concerns. He submits that the renewal of the Agreements was annual, but it coincided with the expiry of the nine years in each span of the Agreement. According to Shri Usgaokar, therefore, a legitimate inference can be drawn that the said composite Agreements were renewed from 1993 upto 2002 and thereafter from 2002 to 2011. The annual renewal of the Agreements thus completes the period of nine years in each case, submits the learned Senior Counsel. Shri Usgaokar further submitted that by a letter dated 5th April, 1999 (page 255), the defendant no.3 requested the Managing Director of defendant no.2 to discuss the future extraction of ore contract. According to the learned Senior Counsel this, itself, reflects that the contract was renewed and was continued. Shri Usgaokar questioned the bona fides of the plaintiffs in approaching the Court by not pointing out - 11 - certain facts in respect of the Agreement between the plaintiffs and the defendant no.3 for raising of the iron ore from the mine. Shri Usgaokar has also relied on a letter dated 16th April, 2003 (page 201) to show that the contract was renewed from lst January, 1994 to 31st December, 2002. I may deal with the submissions of Shri Usgaokar at this stage itself, as I do not find any substance in his submissions and the same can be disposed of here itself. As far as the question of maintainability of the suit is concerned, the same will be tried by the learned Judge of the Trial Court. It is however, pertinent to note that the issue of maintainability of the suit was not at all pressed before the Trial Court, but both the parties proceeded on the basis that the suit was maintainable and, therefore, the issue of interim relief was considered by the learned trial Judge. It is, therefore, too late for the learned Senior Counsel to argue that the suit itself was not maintainable. The question of renewal of the agreement is being dealt with by me at a later point of time. Merely because the dates and years of the continuation of the Agreement every year coincide with the expiry of nine years, it cannot be accepted that there was renewal of the 1984 Agreement for a period of nine years from 1993 to 2002 and thereafter, for another duration of nine years. It is clear from the documents that every year the parties were continuing the transactions on ad-hoc basis. There is no merit in the submission of Shri Usgaokar that the defendant no.3 had written a letter on 5th - 12 - April, 1999 to the defendant no.2 for discussion of the future extraction of ore contract to suggest that there was a renewal of the existing Agreement. This letter is very clear that the defendant no.3 sought appointment with the Managing Director of defendant no.2, who was the main person functioning for defendant nos.1 and 2 and the defendant no.3 wanted to discuss the future contract. If there was a so-called renewal of the Agreement from 1993 to 2002, in that case there was no question of defendant no.3 seeking an appointment with the defendant no.2 for discussion of the contract and, further, in that case, the Managing Director would have promptly said that there is no question of discussion in respect of the renewal of the contract. I, therefore, do not find an iota of substance or merit in the submissions of Shri Usgaokar. NOW I WILL DEAL WITH THE POINTS RAISED BY THE LEARNED COUNSEL FOR THE PLAINTIFFS AND THE DEFENDANT NOS.1 AND 3. 10. I have considered the whole matter and the material before me. I have also considered the submissions of the learned counsel on both the sides. I have carefully gone through the impugned Order passed by the learned Judge of the Trial Court refusing finally to grant temporary injunction to the plaintiffs against the actions of the defendant no.1 in obstructing the plaintiffs in their work on the mines under their subsisting written contract dated 16th - 13 - June, 2003 and in terminating the Manager and other staff of the defendant no.3 in the mine. The facts which have floated on the surface finally are that the 1984 Agreement has not been expressly and specifically renewed by and between the parties as admittedly the defendant no.1 had never exercised his option under Clause 1 of the Agreement in writing to communicate to the defendant no.3 to renew the Agreement for the further period of nine years from 1993 to 2002. After the expiry of the first span of nine years, the year-to-year ad-hoc arrangement appears to have continued. There is no documentary evidence that the defendant no.1 exercised his option to renew the Agreement for a fresh period of nine years. A written contract or Agreement has to be renewed as provided in the Agreement in writing, expressly and specifically. Continuation of the work for the subsequent period on the basis of oral understanding cannot be a substitute for an express written contract of renewal. Alleged oral renewal of the said Agreement is certainly not contemplated by the parties to the written Agreement. Neither payment vouchers for the subsequent period, nor any other planted letters to create evidence of the so-called renewal of the Agreement can take place of a written express Agreement. From the said vouchers and the letters it clearly appears that the defendant no.1 is attempting to create record of renewal of the Agreement retrospectively. The reading of this material is clear to infer that the defendant no.1 is trying to take advantage of the precarious spot in - 14 - which the defendant no.3 is caught on account of his son, who is a cancer patient and the defendant no.3 signed some payment vouchers wherein the defendant no.1 acting smartly grafted a deliberate language of renewal of the Agreement for the second term and the third term of nine years each. This does not appear to be a normal behaviour in any genuine transaction between the parties. Besides, neither these vouchers, nor the letters pertain to the period prior to the expiry of the Agreement or soon thereafter. Any genuine and prudent businessman would place on record his intention to either renew or not to renew the Agreement. It is, therefore, very difficult for this Court to hold that there was an oral renewal of the written Agreement of 1984 after its expiry in 1993. What was continued was ad-hoc working arrangement between the parties. The defendant no.1 would have to step in the witness box and swear on oath that the parties had orally renewed the 1984 written Agreement. The trial is yet to begin and, therefore, no firm conclusion, nor even inference can be drawn at this interlocutory stage that the 1984 Agreement was renewed for the two next spans of nine years each upto December 2011. Such inference would be hazardous for this Court to venture in the absence of any cogent material. The vouchers and the letters addressed by the defendant no.1 cannot make me infer that there was a genuine and bonafide transaction of renewal of the 1984 Agreement between the defendant no.1 and the defendant no.3. This material appears to be motivated and created for the - 15 - purpose of future use in case of need and that is what the defendant no.1 is presently doing. These documents cannot be circumstances to