Arb.A. 2/2008 BEFORE HON’BLE MRS.JUSTICE ANIMA HAZARIKA JUDGEMENT & ORDER This appeal being numbered as Arbitration Appeal No. 2 of 2008 has been filed at the instance of the appellant under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996 (’the Act’ for short) questioning the legality and v alidity of the judgement and order dated 03.01.2008 passed by the learned Distri ct Judge, Dibrugarh in Miscellaneous (Arbitration) Case No. 4 of 2007 filed unde r Section 9 of the Act read with Section 151 of the Code of Civil Procedure, 190 8 (’Code’ for short) whereby and whereunder the learned District Judge, vacated the order of status-quo passed earlier, thereby rejecting the prayer of interim injunction. 2. The facts leading to the filing of this appeal may be summarized as foll ows: The appellant is the owner of the Tea Manufacturing unit under the name and style of Dekhari Tea Factory situated at Dekhari in the district of Dibrug arh. The appellant’s company along with seventeen other companies executed an ag reement on 03.12.2002 with the respondent for availing supply of gas for a perio d of ten (10) years under the terms and conditions stipulated in the said agreem ent for the purpose of consumption of gas in the factories including the generat ion of electricity for running the factories of the companies. The appellant, th erefore, is a BUYER of the gas and the respondent is the SELLER of the gas as pe r the said agreement. The appellant is also a member of Moran Plantation Gas Gri d Suppliers Association (hereinafter referred to as ’MPGGSA’ only) who is the co nfirming party to the said agreement executed on 03.12.2002. But, however, when the said agreement was executed on 03.12.2002, the company did not have any gas generator for generating electricity and only in the month of March 2007 the com pany had purchased gas generator sets of total 375KV capacity and the same was c ommissioned on 02.05.07 and started using gas for generating electricity for con sumption in its factory in terms of unnumbered paragraph 2 of page 2 of the agre ement. The appellant by its letter dated 30.5.2007 duly informed the respondent and MPGGSA about its using gas for the purpose of generating electricity from th e aforesaid date 02.05.2007. The use of gas for generating electricity by the co mpany was noticed by MPGGSA and accordingly, requested the respondent to disconn ect the gas line to the appellant’s generating sets which, however, was informed vide communication dated 01.06.2007 and as such the cause of action for initiat ion of legal proceeding arose and consequently thereupon an application under Se ction 9 of the Act read with Section 151 of the Code was filed being Misc. (Arbi tration) Case No. 4 of 2007 on the file of the learned District Judge, Dibrugarh , who initially directed the respondent to maintain status quo vide order dated 18.06.2007 and subsequently rejected the same after hearing the parties vide or der dated 03.01.2008 which is under challenge before this Court. 3. Referring to the agreement executed on 03.12.2002, Mr. K Agarwal, the le arned counsel appearing for the appellant has submitted that the unnumbered para graph 2 at page 2 would show that the respondent (SELLER) agreed to supply gas t o the BUYER for consumption in the factory as well as for generating electricity for running the factory as mentioned in Annexures-I, II and III (Part of the ag reement dated 03.12.2002) and the company consumes the gas in the factory either for running the Dryer Machine, Withering trough or for running the generating s ets which are in the factory and not outside the factory and as such the learned trial judge committed an error apparent on the face of the record in rejecting the prayer for interim injunction vide order dated 03.01.2008 which requires int erference or else it would cause irreparable loss and injury which cannot be com pensated in terms of money. 4. Mr. Agarwal has further contended that there is a clause viz., Arbitrati on clause being Clause No. 17 of the agreement dated 03.12.2002 whereby it is st ipulated that any dispute or difference arising out of or in connection with the agreement including any dispute or difference regarding its interpretation or a ny clause thereof, shall be referred to a mutually agreed arbitrator under India n Arbitration Act, 1940 and the decision taken by the Arbitrator shall be final and binding on the parties. Existence of dispute and the Arbitration Agreement a nd party’s intention to resolve the dispute through arbitration by serving notic e dated 9.6.2007 on the respondent are present in the case in hand. Therefore, r ejection of the prayer for interim injunction by the learned trial Court has fru strated the very purpose of enacting Section 9 of the Act. The impugned order th us deserves to be interfered with in the facts and circumstances of the case. 5. Drawing the attention of the Court to the agreement dated 03.12.2002, th e learned counsel submitted that there is no stipulation in the agreement that t he BUYER who does not have any generating sets at the time of execution of the a greement cannot use the gas supplied by the respondent for the purpose of genera ting electricity for running the BUYER’s factory or require prior permission fro m MPGGSA or the respondent for using gas for the purpose of generation of electr icity for running its factory and the agreement do not empower the respondent to disconnect the gas supply to the appellant’s factory and as such the learned Di strict Judge has committed an error apparent on the face of the record in interp reting the agreement in its true spirit and hence, the order under challenge is required to be set aside and quashed. 6. The counsel has further submitted that the total booked volume of gas fo r 18 Companies/Consumers (BUYER) is 112 lakhs Standard Cubic Meters (’SCUM’ for short), therefore, there is no specific stipulation in the agreement dated 3.12. 2002 as to how much gas each BUYER is entitled to use annually and there being 1 8 BUYERs including the appellant, each of them are entitled to consume at least 6.22 lakhs scum of gas annually and the record would show that the appellant has never exceeded its share of booked quantity of gas and the learned trial Court has failed to take note of the entire situation including the pleadings set fort h by the parties and as such the impugned order dated 03.01.2008 required to be modified in the facts and circumstances of the case by granting interim injuncti on till the case is settled through arbitration. 7. Refuting the argument advanced by the counsel appearing for the appellan t, Mr. KH Choudhury, learned Senior counsel, assisted by Mr. SK Muktar, learned counsel appearing for the respondent drawing the attention of this Court to the agreement dated 03.12.2002 along with the Annexures-I, II and III which are the part of the agreement would urge that Annexure-II disclosed the names of the 9 ( nine) consumers having generating sets for generation of electricity in the fact ories and the Annexure-III contains the names of 18 companies/consumers having t heir factories only. The name of the appellant company does not figure in Annexu re-II and as such there was no contract of supply of natural gas to the generati ng sets of the appellant. The appellant is entitled for consumption of natural g as for running its factory only, inasmuch as, there was no contract agreement fo r supply and transportation of natural gas to the generating sets of the appella nt and as such the appellant is the BUYER through MPGGSA of the gas for consumpt ion in their factory only and not to its generating set. The MPGGSA is also the confirmatory party in the contract agreement. The appellant in the instant case without any authority and without executing any contract commissioned the pipe l ine for consumption of gas for their generating set and also started using the g as for generation of electricity in the factory without any information and prio r permission either from MPGGSA and the respondent company and as such no interf erence with the impugned order is called for. 8. The Senior counsel has further contended that the clause 3.1 and 21 of t he agreement provides a stipulation which is mandatory for the parties of the ag reement to obtain permission from the respondent about laying of the pipeline to their generating sets or handing over the same to the respondent which has not been done by the appellant rather, commissioned the pipeline stealthily and star ted consumption of gas in their generating sets without any information which re sulted in disconnection and thus the appeal deserves to be dismissed considering the conduct of the appellant. 9. Considered the arguments advanced by the contesting parties. Perused the pleadings alongwith the annexures appended thereto. The entire dispute revolves around the agreement executed on 03.12.2002 and the annexures appended to the a greement, which are parts of the agreement and have been admitted by the parties . Therefore, in order to determine the lis between the parties, it would be appr opriate to quote unnumbered paragraph 2 at page 2, 3.1 and 21 of the agreement, which reads as follows: That the BUYER is desirous of having natural Gas (hereinafter called ’GAS’) for consumption in the Factories as well as for generation of electricity for runni ng of their factory of the Tea Estates/Consumers as mentioned in Annexure-I, II & III enclosed herewith and the SELLER being the distributor of GAS in the area is agreeable to supply GAS to the BUYER for the purposes as aforementioned. 3.1 With effect from the commencement of this agreement, the SELLER shall ta ke charge of the branch lines (previously installed and owned by the BUYER) and maintain at their cost, complete repair/modification of the branch lines and res ponsibility of these lines shall henceforth be vested on the SELLER. For all pur poses, the SELLER will be responsible for transportation and supply of gas from source to the Consumer’s premises of all members of the Grid/BUYER. The BUYER wi ll provide and operate its own pipelines from the said off take points up to the points of consumption of Gas by the BUYER, and such installation of the BUYER’s pipeline shall have to be to the satisfaction of the SELLER who will have the r ight to inspect the BUYER’s pipeline from time to time and the BUYER undertakes to afford all facilities for such inspection and to rectify immediately any defe cts in the pipelines and accessories, as may be pointed out by the SELLER and pe nding such rectification, the SELLER shall not supply any Gas to the defective p ortion of the line on safety grounds. 21. It is hereby agreed by and between the parties hereto that for convenien ce of supply and management and maintenance of Gas supply, the BUYER/Confirmator y Party will hand over the entire Branch pipelines leading to the individual Tea Estates from the off take points at Moran and Deroi, diameters of which are ran ging from 50 mm to 150 mm and approx. length 84 km owned by the BUYER to the SEL LER with effect from the date of signing of this agreement on as is where is b asis and the SELLER will be the owner of the said pipelines henceforth and shall from the date of execution of the agreement be responsible for its proper maint enance, ensuring supply of Gas at the Battery limits of the member Tea Estates o f the BUYERs. 10. Admittedly on the date of execution of the agreement dated 03.12.02 the appellant company did not have any gas generator set for generating electricity, which, however, commissioned on 02.05.07 and started using gas for generating e lectricity. On 1.6.2007, the Secretary of MPGGSA issued a letter (Annexure-III) to the respondent company whereby he informed regarding insufficient gas pressur e situation prevailing in the pipe line due to the unauthorized connection of ga s pipe line and consumption for generation of electricity by generating set by t he appellant. The MPGGSA by their said letter requested the respondent to discon nect the line. Accordingly, the officials of the respondent in response to the s aid information made by the MPGGSA inspected the appellant factory on 1.7.2007 a nd when they found the illegal pipe line connection to its generating set, the o fficials of the respondent Company disconnected the supply and transportation of gas and on 8.6.2007 informed the appellant about disconnection of the pipeline. But despite the disconnection of the pipeline the appellant turned the main val ve of the pipeline for restoration of the supply of gas of its factory as well a s to its generating set and thus continued the consumption of gas and even after its disconnection by the respondent company. On 3.7.2007 when the respondent fo und extreme low pressure and gas volume in transportation of gas in the pipeline it necessitated immediate stoppage of gas flow and the respondent, therefore, f or technical reason was compelled to stop the supply of gas in the main pipeline . However, after improvement of gas pressure in the pipeline the respondent agai n restored the supply of gas to the appellant’s factory only excluding the gener ating set as per terms and conditions of the agreement as contained in Annexure- III, inasmuch as, the name of appellant company do not figure in annexure-II. In Annexure-II of the agreement, only 9 (nine) tea estates’ names find place for s upply of gas required for running generation sets. 11. Apart from the facts stated hereinabove, Clause 6 to the agreement is al so relevant in deciding the case as to whether ad interim injunction can be gran ted restraining the respondent to disconnect the gas for generating sets. Clause 6.4 of the agreement provides that in case the BUYER requires greater volume of Gas, he shall issue notice to the SELLER of not less than 6 months in writing a nd shall state in such notice estimated future requirement of gas by the BUYER. Clause 7 of the agreement speaks about pressure of gas to be supplied by the SEL LER, compliance of which clause could not be substantiated by the appellant in t his case. 12. In order to obtain an order of injunction, the party, who seeks for gran t of such injunction has to prove that he has made out a prima facie case, the b alance of convenience is also in his favour and he will suffer irreparable loss and injury if injunction is not granted. But it is also equally settled law that when a party fails to prove the prima facie case, the question of considering t he balance of convenience or irreparable loss and injury would not be material. Existence of a strong prima facie case is a sine-qua-non for grant of injunction , therefore, if the party fails to prove a prima facie case even if a case of ba lance of convenience is made out in his favour and that he would suffer irrepara ble loss and injury if no injunction order is granted, injunction order many not be granted. 13. In the instant case, the proven facts pleaded and established, it would go to show that the appellant was not a party included in Annexure-II of the agr eement executed on 3.12.2002 between the parties. In absence of benefit availabl e to the appellant in Annexure-II of the agreement, supply of gas to his generat ing set would not be available and thus, the appellant has failed to prove a pri ma facie case to go for trial. Apart from the three basic principles as mentione d hereinabove, there is another factor which is required to be considered in ord er to get the benefit of equity. Admittedly on the date of execution of the agre ement, there was no generating set in the premises of the factory of the appella nt company, which, however, was installed in the year 2007 and get the electric connection to the generating set violating Clause 6 of the agreement dated 3.12. 2002. Therefore, the conduct of the appellant precluded him to get the benefit o f equity in the matter of granting ad interim injunction and the appellant has f ailed to prove prima facie case in order to get the benefit of ad interim injunc tion. 14. That being the position, this Court is in full agreement with the views expressed by the learned trial Court rejecting the prayer for ad interim injunct ion holding that the appellant has violated Clause 6 and 7 of the agreement date d 3.12.2002 which requires no interference in this appeal. 15. In the result, the appeal fails, whereof the order under challenge is af firmed holding that no case is made out for interference with the order dated 3. 1.2008 passed by the learned District Judge, Dibrugarh in Miscellaneous (Arbitra tion) Case No.4/2007. 16. Parties are left to bear their own costs.