Case: Hardesh Ores Pvt. Ltd Vs. Timblo Minerals Pvt. Ltd.

in writing has refused to renew and terminated the contract of the old contractor. Thereafter, he has entered into a written contract on higher price with the new contractors. The old contractor, therefore, has no right in presenti to remain in possession of the mine and to operate it. According to learned counsel for the new contractors, there is no counter suit filed by the old contractor to specifically enforce any alleged agreement of renewal of the contract and such relief cannot be legally granted in view of the bar contained in clause (c) of sub-section (1) of Section 14 of the Specific Relief Act which provides that a contract in its nature determinable is unenforceable. 10. The suit is pending for trial on merits. We would not, therefore, express any option, one way or the other, on the merits of the contentions advanced. On the basis of three established principles for grant of temporary injunction e.g., prima facie case, balance of convenience and irreparable loss, in our considered opinion, it would not be appropriate to interfere with the order of the High Court at the present stage of the suit and disturb the working of the mine by the new contractors who have already commenced operations from June 2003 and, as alleged, entered into business commitments for supply of iron ore to different parties in the outside India.11. After considering the comparative merit of the case of either parties and their rival claims, we have formed an opinion that the High Court ought not to have granted unconditional order of temporary injunction by ignoring the huge investments which have been made by the old contractor to operate the mine under an existing arrangement and alleged renewal of the contract by their mutual conduct.12. In the course of hearing, on behalf of the old contractor, learned counsel has handed over to us in writing the proposed terms and conditions on which it seeks restoration of possession of the mine and permission to operate the same. The proposed terms suggested by the appellants have been opposed by the new contractors and their response in writing has also been placed before us. Taking tentatively the figures mentioned by the new and old contractors in their proposed terms and responses submitted orally and in writing indicating the extent of investments and estimated profits, we consider it appropriate to modify the impugned order of grant of temporary injunction passed by the High Court by imposing the following conditions:- 1) An a pre-condition for further operating the mine, the new contractors shall furnish a Bank Guarantee or a Solvent Security to the satisfaction of the Trial Court in the sum of Rupees Five Crores towards the estimated investments already made by the old contractor in the mine from the year 1984 in prospecting, developing, digging bore holes, removal of rejection, making benches, putting up infrastructural facilities, acquiring surface rights, to dump rejects, cost of shifting of school, electrification, research and development etc. The Bank guarantee or solvent security, as the case may be, to the satisfaction of the trial court shall be furnished within a period of four weeks from today.2) The new contractors shall, by the end of every month, deposit in the trial court a sum of Rupees 50/- per metric ton, on the basis of payment slips of trucks and monthly returns submitted to the statutory mine authorities, on each quantity of ore extracted and exported by them, in order to reimburse, in the event of dismissal of the suit, the loss of estimated profit caused to the old contractor.3) The amounts aforementioned to be deposited in respect of the quantities of Ore extracted and exported shall be kept by the Trial Court, when deposited, in fixed deposit in a nationalised Bank so that they earn current rate of interest. The amounts shall be paid on final decision of the suit by the Trial Court to the party held entitled to it.4) At the conclusion of the trial and decision of the suit, the trial court shall pass consequential orders for payment of the amount covered by the Bank Guarantee or solvent security and the amounts periodically deposited for the ore extracted and exported in the manner directed above.5) As admitted by the parties, the quantity of iron ore already extracted during period of working by the old contractor is stacked at the site in the mining area. Without going into the dispute of extent of quantity of iron ore extracted and stacked at site and its value, we direct that the old contractor shall be allowed to collect and transport the same in accordance with the then existing terms of the written contract between the old contractor and the mining-lease-owner. In collecting and transporting the aforementioned quantity of iron ore, the old contractor shall follow not only the terms of the contract but also all statutory provisions and rules regulating the extraction and transportation of minerals. It shall also submit necessary statutory returns and clear dues, if any, of statutory Authorities in accordance with law. In order of allow the old contractor to take away the iron ore extracted by it and stacked at the site, the trial court shall appoint a Commissioner to be assisted by a statutory mining authority to supervise the work.13. Looking to the nature of the dispute, the rival claims and high stakes of the parties involved in running the mine, we direct the Trial Court to expedite the trial of the suit and to make all endeavour to decide the same early and in any event before December 2004.14. All legal grounds and contentions are left open to the parties to be urged before the Trial Court. The trial court shall, on the basis of the evidence produced before it, decide the suit in accordance with law and regardless of any observations made by the trial court and the High Court in their orders while disposing of the subject matter of grant of temporary injunction.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. The suit is pending for trial on merits. We would not, therefore, express any option, one way or the other, on the merits of the contentions advanced. On the basis of three established principles for grant of temporary injunction e.g., prima facie case, balance of convenience and irreparable loss, in our considered opinion, it would not be appropriate to interfere with the order of the High Court at the present stage of the suit and disturb the working of the mine by the new contractors who have already commenced operations from June 2003 and, as alleged, entered into business commitments for supply of iron ore to different parties in the outside India.11. After considering the comparative merit of the case of either parties and their rival claims, we have formed an opinion that the High Court ought not to have granted unconditional order of temporary injunction by ignoring the huge investments which have been made by the old contractor to operate the mine under an existing arrangement and alleged renewal of the contract by their mutual conduct.12. In the course of hearing, on behalf of the old contractor, learned counsel has handed over to us in writing the proposed terms and conditions on which it seeks restoration of possession of the mine and permission to operate the same. The proposed terms suggested by the appellants have been opposed by the new contractors and their response in writing has also been placed before us. Taking tentatively the figures mentioned by the new and old contractors in their proposed terms and responses submitted orally and in writing indicating the extent of investments and estimated profits, we consider it appropriate to modify the impugned order of grant of temporary injunction passed by the High Court by imposing the followingion for further operating the mine, the new contractors shall furnish a Bank Guarantee or a Solvent Security to the satisfaction of the Trial Court in the sum of Rupees Five Crores towards the estimated investments already made by the old contractor in the mine from the year 1984 in prospecting, developing, digging bore holes, removal of rejection, making benches, putting up infrastructural facilities, acquiring surface rights, to dump rejects, cost of shifting of school, electrification, research and development etc. The Bank guarantee or solvent security, as the case may be, to the satisfaction of the trial court shall be furnished within a period of four weeks from today.2) The new contractors shall, by the end of every month, deposit in the trial court a sum of Rupees 50/per metric ton, on the basis of payment slips of trucks and monthly returns submitted to the statutory mine authorities, on each quantity of ore extracted and exported by them, in order to reimburse, in the event of dismissal of the suit, the loss of estimated profit caused to the old contractor.3) The amounts aforementioned to be deposited in respect of the quantities of Ore extracted and exported shall be kept by the Trial Court, when deposited, in fixed deposit in a nationalised Bank so that they earn current rate of interest. The amounts shall be paid on final decision of the suit by the Trial Court to the party held entitled to it.4) At the conclusion of the trial and decision of the suit, the trial court shall pass consequential orders for payment of the amount covered by the Bank Guarantee or solvent security and the amounts periodically deposited for the ore extracted and exported in the manner directed above.5) As admitted by the parties, the quantity of iron ore already extracted during period of working by the old contractor is stacked at the site in the mining area. Without going into the dispute of extent of quantity of iron ore extracted and stacked at site and its value, we direct that the old contractor shall be allowed to collect and transport the same in accordance with the then existing terms of the written contract between the old contractor and theIn collecting and transporting the aforementioned quantity of iron ore, the old contractor shall follow not only the terms of the contract but also all statutory provisions and rules regulating the extraction and transportation of minerals. It shall also submit necessary statutory returns and clear dues, if any, of statutory Authorities in accordance with law. In order of allow the old contractor to take away the iron ore extracted by it and stacked at the site, the trial court shall appoint a Commissioner to be assisted by a statutory mining authority to supervise the work.13. Looking to the nature of the dispute, the rival claims and high stakes of the parties involved in running the mine, we direct the Trial Court to expedite the trial of the suit and to make all endeavour to decide the same early and in any event before December 2004.14. All legal grounds and contentions are left open to the parties to be urged before the Trial Court. The trial court shall, on the basis of the evidence produced before it, decide the suit in accordance with law and regardless of any observations made by the trial court and the High Court in their orders while disposing of the subject matter of grant of temporary injunction.